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Corruption and Firm Growth: Evidence from around the World

Abstract : We empirically investigate the relationship between corruption and growth using a firm-level data set that is unique in scale, covering almost 88,000 firms across 141 economies in 2006-2020, with wide-ranging corruption experiences. The scale and detail of our data allow us to explore the corruption-growth relationship at a very local level, within industries in a relatively narrow geography. We report three empirical regularities. First, firms that make zero informal payments tend to grow slower than bribers. Second, this result is driven by non-bribers in high-corruption countries. Third, among bribers growth is decreasing in the amount of informal payments in both high- and low-corruption countries. We suggest that this set of results may be reconciled with a simple model in which endogenously determined higher bribe rates lead to lower growth, while non-bribers are often excluded entirely from growth opportunities in high-corruption settings.
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https://hal-sciencespo.archives-ouvertes.fr/hal-03385243
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Submitted on : Tuesday, October 19, 2021 - 2:13:28 PM
Last modification on : Monday, March 21, 2022 - 2:47:49 PM
Long-term archiving on: : Thursday, January 20, 2022 - 7:06:43 PM

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Raymond Fisman, Sergei Guriev, Carolin Ioramashvili, Alexander Plekhanov. Corruption and Firm Growth: Evidence from around the World. 2021. ⟨hal-03385243⟩

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