The impact of bribes on firm level innovation of MSMEs: Evidence from developing economies

Thrikawala, Sujani and Locke, Stuart and Wellalage, Nirosha Hewa (2019) The impact of bribes on firm level innovation of MSMEs: Evidence from developing economies. 2019 Ineka Conference, Verona, Italy, 11-13 June, 2019. (Submitted)

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Abstract or Summary

Bribery is a rational strategic response of micro-, small and medium enterprise innovators, compensating for the lack of kinship or political affiliations, and hedging against political risk. Larger corporations exploit political affiliations; smaller firms use bribery at the level of lower officials, compensating for lack of property rights, rule of law and an effective judiciary. Analysis of World Bank Surveys, for South American countries, using propensity score matching indicates the determinants of the corruption–innovation relationship has a positive correlation between bribery and innovation. Although the corruption is less damaging, it is a pervasive obstacle to economic development. Strong regulations can overcome this obstacle, as corruption only works in weak institutional structures.

Item Type:Paper presented at a conference, workshop, or other event which was not published in the proceedings
Keywords that describe the item:Corruption, Innovation, Bribes, MSMEs, Credit Access, Emerging Countries
Subjects:H Social Sciences > HA Statistics
H Social Sciences > HG Finance
Divisions:Schools > Centre for Business, Information Technology and Enterprise > School of Business and Adminstration
ID Code:7268
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Deposited On:05 Nov 2020 05:44
Last Modified:05 Nov 2020 05:44

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