Corruption and the Efficiency of Capital Investment in Developing Countries
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Corruption and the Efficiency of Capital Investment in Developing Countries. / O’Toole, Conor M.; Tarp, Finn.
I: Journal of International Development, Bind 26, Nr. 5, 2014, s. 567-597.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Corruption and the Efficiency of Capital Investment in Developing Countries
AU - O’Toole, Conor M.
AU - Tarp, Finn
PY - 2014
Y1 - 2014
N2 - This paper tests the effect of corruption on the efficiency of capital investment. Using firm-level data from the World Bank Enterprise Surveys, covering 90 developing and transition economies, we consider whether the cost of informal bribe payments distorts the efficient allocation of capital by reducing the marginal return per unit investment. Controlling for censoring and endogeneity, we find that bribery decreases investment efficiency. The negative effect is strongest for domestic small-sized and medium-sized enterprises. We conclude that reducing the level and incidence of bribery by public officials would facilitate a more efficient allocation of capital.
AB - This paper tests the effect of corruption on the efficiency of capital investment. Using firm-level data from the World Bank Enterprise Surveys, covering 90 developing and transition economies, we consider whether the cost of informal bribe payments distorts the efficient allocation of capital by reducing the marginal return per unit investment. Controlling for censoring and endogeneity, we find that bribery decreases investment efficiency. The negative effect is strongest for domestic small-sized and medium-sized enterprises. We conclude that reducing the level and incidence of bribery by public officials would facilitate a more efficient allocation of capital.
U2 - 10.1002/jid.2997
DO - 10.1002/jid.2997
M3 - Journal article
VL - 26
SP - 567
EP - 597
JO - Journal of International Development
JF - Journal of International Development
SN - 0954-1748
IS - 5
ER -
ID: 129825050