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Corruption and Social Interaction: Evidence from China

  • Bin Dong

    (QUT)

  • Benno Torgler

    ()

    (QUT)

Registered author(s):

    We explore theoretically and empirically whether social interaction, including local and global interaction, influences the incidence of corruption. We first present an interaction-based model on corruption that predicts that the level of corruption is positively associated with social interaction. Then we empirically verify the theoretical prediction using within-country evidence at the province-level in China during 1998 to 2007. Panel data evidence clearly indicates that social interaction has a statistically significantly positive effect on the corruption rate in China. Our findings, therefore, underscore the relevance of social interaction in understanding corruption.

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    File URL: http://external-apps.qut.edu.au/business/documents/discussionPapers/2010/WP261.pdf
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    Paper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 261.

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    Length: 19 pages
    Date of creation: 26 Nov 2010
    Date of revision:
    Handle: RePEc:qut:dpaper:261
    Contact details of provider: Postal: GPO Box 2434, BRISBANE QLD 4001
    Web page: http://www.bus.qut.edu.au/faculty/economics/
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