BUSINESS REGULATION AND ECONOMIC GROWTH: THE INDIRECT EFFECT OF CORRUPTION IN LATIN AMERICA AND THE CARIBBEAN

This paper explores how corruption indirectly affects economic growth through business regulation in Latin America and the Caribbean, a relationship that has scarcely been addressed in the literature. Although regulation of the private sector explains GDP per capita, the effect is conditioned by the...

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Bibliographic Details
Published in:Journal of developmental entrepreneurship 2018-03, Vol.23 (1), p.1850003
Main Authors: FERNÁNDEZ-TORRES, YAKIRA, GUTIÉRREZ-FERNÁNDEZ, MILAGROS, RAMAJO-HERNÁNDEZ, JULIÁN
Format: Article
Language:English
Subjects:
Corruption
Economic growth
GDP
Gross Domestic Product
Per capita
Regulation
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Summary:This paper explores how corruption indirectly affects economic growth through business regulation in Latin America and the Caribbean, a relationship that has scarcely been addressed in the literature. Although regulation of the private sector explains GDP per capita, the effect is conditioned by the level of corruption. When the control of corruption is greater, there is an increase in the extent to which bureaucracy when starting a business and trading across borders negatively affects GDP per capita in Latin America and the Caribbean. This finding corroborates the “greasing the wheels” hypothesis.
ISSN:1084-9467
1793-706X
DOI:10.1142/S1084946718500036