Abstract
There are very different outcomes in the literature regarding the influences of corruption on business innovation and also arguments for both “sanding the wheels” and “greasing the wheels” approaches. The main goal pursued in this paper is to broaden the understanding of the corruption influence on business innovation, considering seven representative dimensions of corruption at governmental structures and institutions’ level and also four relevant dimensions of business innovation, less approached so far. The originality and relevance of this paper are based on that these seven different dimensions of corruption are targeting three characteristic features of it, as bribery's prevalence, the bribery's spread and the companies’ propensity to offer gifts for overcoming the bureaucratic pressures. Moreover, the four different new dimensions of business innovation are targeting the company’s propensity for innovating and strengthening its image and the way of connecting with business partners in a changing business environment. Considering an extensive data set for 110 emergent countries from four continents for the period between 2002 and 2014 and using the generalized linear model framework, this research study is emphasizing that corruption at governmental structures and institutional level has a significant negative impact on business innovation, adversely affecting innovation perspectives.
Highlights
Innovation is considered to be an important factor in increasing the companies’ competitiveness and economic development (Janoskova & Kral, 2015)
Companies need to find mechanisms and tools to overcome social and economic difficulties, as well as red tape hindrances. These conclusions are reinforced by Ayyagari, Demirgüç-Kunt, and Maksimovic (2014) in their study covering 57 developing countries that highlights the fact that the influence of corruption upon innovation activity is more acutely felt in countries with low levels of development characterized by inefficient government structures and institutions
Focusing on developing and emerging countries, Paunov (2016) analysed the influence of corruption on business innovation. She proved that corruption is a significant factor in reducing the companies’ chances to obtain recognized quality certification, as a relevant business innovation dimension
Summary
Innovation is considered to be an important factor in increasing the companies’ competitiveness and economic development (Janoskova & Kral, 2015). Business innovation is perceived increasingly more as a key factor for enhancing the business viability, especially in unstable environment (Abdi et al, 2018). Based on the economic theory, corruption is perceived either as a “principal agent problem” or as a “collective action problem” (Begovic, 2005; Marquette & Peiffer, 2015) These two different approaches are considered by some authors to be mutually exclusive, while others consider them to be complementary (Stephenson, 2015). These differences of approaches may be the basis of an incomplete understanding of the phenomenon of corruption and the failure in reducing its impact on the economy
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