Does corruption grease or sand the wheels of investment or innovation? Different effects in advanced and emerging economies

Yuna Heo, Fangfang Hou, Seongkyu Gilbert Park

Research output: Journal article publicationJournal articleAcademic researchpeer-review

1 Citation (Scopus)

Abstract

We assess different effects of corruption on corporate activities depending on whether a firm operates in an advanced or emerging economy. In emerging economies, greater corruption is related to greater capital expenditures. In advanced economies, greater corruption is positively related to innovation. Further, we find the relationship between corruption and capital exp20enditure (innovation) is moderated by diversification. Our findings suggest that corruption leads firms to take more action in the areas that the economy has a competitive edge in.

Original languageEnglish
Pages (from-to)35-60
Number of pages26
JournalApplied Economics
Volume53
Issue number1
DOIs
Publication statusPublished - 2021

Keywords

  • advanced economies
  • corporate investment
  • Corruption
  • emerging markets
  • innovation

ASJC Scopus subject areas

  • Economics and Econometrics

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