New products and corruption: evidence from Indian firms
It has been shown that corruption has a negative effect on firm productivity, but what about its impact on product innovation? We find that corruption, functioning as a bribe tax, diminishes the probability of new product introduction. We use a World Bank Enterprise Survey from India in 2005, with 1600 firms answering if they introduced a new product to the firm and on the average quantity of bribe paid by firms. Controlling for innovation determinants, firm characteristics, location choice, multi-product firms and other business environment variables, sector-location bribe averages have a negative and significant impact on product innovation.
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| Length: | 28 pages |
| Date of creation: | May 2011 |
| Date of revision: | |
| Handle: | RePEc:mse:cesdoc:11033 |
| Contact details of provider: | Postal: Phone: + 33 44 07 81 00 Fax: + 33 1 44 07 83 01 Web page: http://centredeconomiesorbonne.univ-paris1.fr/ More information through EDIRC
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