30.10.2012
at 10.30
Anna Kochanova (CERGE-EI): The impact of bribery on firm performance: evidence from Central and Eastern Europe
Abstract
I examine the relation between bureaucratic corruption ('to get things done') and firm performance in Central and Eastern European countries. While previous research relies on data from the BEEPS survey, which suffers from excessive non-reporting of corporate performance, I combine the BEEPS information on bribery with reliable firm performance data from the Amadeus database. The estimates, identified from within-firm variation, suggest that bureaucratic corruption negatively affects both sales growth and labor productivity growth of firms. However, conditional on a given level of corruption in a narrowly defined local market, a higher dispersion of firms’ bribing behavior within such a market appears to facilitate firm performance. I provide an explanation for this finding and also investigate the effect of bribery with respect to the heterogeneity of firms and countries' overall institution environments.
I examine the relation between bureaucratic corruption ('to get things done') and firm performance in Central and Eastern European countries. While previous research relies on data from the BEEPS survey, which suffers from excessive non-reporting of corporate performance, I combine the BEEPS information on bribery with reliable firm performance data from the Amadeus database. The estimates, identified from within-firm variation, suggest that bureaucratic corruption negatively affects both sales growth and labor productivity growth of firms. However, conditional on a given level of corruption in a narrowly defined local market, a higher dispersion of firms’ bribing behavior within such a market appears to facilitate firm performance. I provide an explanation for this finding and also investigate the effect of bribery with respect to the heterogeneity of firms and countries' overall institution environments.
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