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Bribery environments and firm performance: Evidence from CEE countries
Institution:1. CERGE-EI, Politickych veznu 7, 11121 Prague, Czech Republic;2. CEPR, London, United Kingdom;3. Max Planck Institute for Research on Collective Goods, Kurt-Schumacher-Str. 10, 53113 Bonn, Germany;1. Italian Transport Authority, Italy;2. University of Genova, Italy;3. University of Bologna, Italy;1. Monitoring and Evaluation Division, Alliance for a Green Revolution in Africa, Kenya;2. Department of Economics, Southern Illinois University-Carbondale, United States
Abstract:We examine the relation between bureaucratic corruption and firm performance in CEE countries. We show that divergent consequences of corruption found in previous studies can be explained by the specifics of the local bribery environment in which firms operate. A higher mean bribery is associated with lower firm performance, while higher dispersion of individual firm bribes appears to facilitate it. We also conduct a detailed analysis by firm sector and size, and countries' institutional environments.
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