Abstract
Corruption induces a shift in entrepreneurial activity in the economy from creative and innovative activities to areas influenced by rent-seeking and cronyism. This study examined the relationship between corruption and entrepreneurial activities in the region from 2012 to 2017 targeting primary local governments. The analysis model was constructed as follows: the explanatory variable, corruption, was set as an integrity index (general integrity level, external integrity level, and internal integrity level), and the dependent variable, entrepreneurial activities, which consist of the percentage of construction and that of education in the region, respectively. The construction industry was defined as an area highly affected by corruption, while the education industry was defined as less affected by corruption. The results are as follows. External integrity and concentration in the construction industry have a negative relationship, while internal integrity has a positive relationship. In addition, internal, external, and general integrity level indices all had a positive relationship with the concentration in the education industry. The analysis results mostly confirmed the research hypothesis that local corruption affects changes in entrepreneurial activities.
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