Working Paper: CEPR ID: DP10499
Authors: Jan Hanousek; Anna Kochanova
Abstract: We examine the relation between bureaucratic corruption and firm performance in CEE countries. While previous research uses data from BEEPS, which suffers from excessive non-reporting of corporate performance, we combine reliable firm financials from the Amadeus database with information on bribery practices from BEEPS. We show that differing consequences of corruption found in previous studies could be explained by the corruption environment in which a firm operates. Basically, higher mean bribery is associated with lower performance, while higher dispersion of individual firm bribes appears to facilitate firm performance. A detailed analysis is conducted by firm sector and size, and countries? institutional environments.
Keywords: Bureaucratic corruption; CEE countries; Firm bribing behavior; Firm performance
JEL Codes: D22; D73; O12; P37
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher bribery mean (D73) | decrease in sales growth (O49) |
| higher bribery mean (D73) | decrease in labor productivity growth (O49) |
| higher bribery dispersion (D73) | increase in sales growth (O00) |
| higher bribery dispersion (D73) | increase in labor productivity growth (O49) |