Working Paper: CEPR ID: DP16060
Authors: Raymond Fisman; Sergei Guriev; Carolin Ioramashvili; Alex Plekhanov
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-corruptioncountries. 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.
Keywords: corruption; firm growth; enterprise surveys
JEL Codes: D22; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| zero informal payments (H89) | slower growth (O49) |
| informal payments (J46) | sales growth (O49) |
| amount of informal payments (J46) | growth (O40) |
| modest bribes (D73) | faster growth (O49) |
| high bribes (H57) | slower growth (O49) |
| bribery dynamics (D73) | access to growth opportunities (O49) |