How Bribery Distorts Firm Growth : Differences by Firm Attributes
How corruption affects economic performance has been studied for over a decade. Yet the lack of detailed firm-level data has limited research regarding who is carrying the real burden of corruption. This study shows that for firms in the Latin Amer...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/04/16237366/bribery-distorts-firm-growth-differences-firm-attributes http://hdl.handle.net/10986/6049 |
| Summary: | How corruption affects economic
performance has been studied for over a decade. Yet the lack
of detailed firm-level data has limited research regarding
who is carrying the real burden of corruption. This study
shows that for firms in the Latin America and Caribbean
region, bribery significantly distorts firm growth. Firms
that pay bribes when conducting business transactions --
such as applying for permits, electricity, or water
connections -- have 24 percent lower annual sales growth
than firms that do not face such solicitations. Moreover,
these distortions are more severe for low-revenue-generating
and young firms. Using the instrumental variables method,
the authors show that these results are robust to different
specifications and the use of different sub-samples. |
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