Effect of corruption on firm level innovation: Evidence from Pakistan

Corruption is a widespread phenomenon in majority of the developing countries. However, literature evident both positive and negative impact of corruption in economises at macro level. At the micro level the studies rarely exist explaining this phenomenon. This paper empirically investigates the mic...

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Bibliographic Details
Published in:Economics and business letters 2020-03, Vol.9 (1), p.41-47
Main Authors: Imran, Syed Muhammad, Rehman, Hafeez Ur, Khan, Rana Ejaz Ali
Format: Article
Language:English
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Summary:Corruption is a widespread phenomenon in majority of the developing countries. However, literature evident both positive and negative impact of corruption in economises at macro level. At the micro level the studies rarely exist explaining this phenomenon. This paper empirically investigates the micro level impact of corruption on firms’ innovation. For the purpose, we use “percent of firms expected to give gifts to public officials (to get things done)” as a proxy for corruption, and innovation is measured by “firms that introduce new or significantly improved products or services over the last three years”. The results explain that corruption augments firms’ innovation, that is, “grease the wheels” exists in the case of Pakistan.
ISSN:2254-4380
2254-4380
DOI:10.17811/ebl.9.1.2020.41-47