Negative Effects Of Corruption Research Articles

Etik Problem Olarak Yolsuzluk, Nedenleri ve Yolsuzluğa Karşı Alınabilecek Önlemler

Corruption is a complex ethical issue that has profoundly affected social, economic and political systems in both developed and developing countries throughout history. This study aims to comprehensively discuss the definition of corruption, measurement methods, causes, effects and measures that can be taken against this problem. Corruption can be defined as the abuse of authority by public officials for their personal interests and can occur in various forms such as bribery and embezzlement. Causes of corruption include unclear laws and regulations, opportunities for abuse of power, low income levels, and inadequate enforcement of property rights and the rule of law. The negative effects of corruption are that it weakens the credibility of the state by eroding the social and economic fabric of society and hinders economic development. In this context, measures that can be taken against corruption include strategies such as strengthening the educational and cultural structure, democratization and strengthening of civil society, restructuring the state, transparency and accountability, judicial reform, improving the salaries of public officials and developing religious awareness. This study attempts to find effective and applicable solutions by examining the causes and effects of corruption in depth. Anti-corruption strategies will play an important role in preventing and reducing corruption by raising awareness in all segments of society. Keywords: Corruption, Ethics, Combating Corruption, Transparency, Public

A spatial analysis of local corruption on foreign direct investment: Evidence from Chinese cities

This paper examines local corruption’s direct and spillover effects on city-level foreign direct investment (FDI) flows in China. The empirical analysis is based on a new dataset on local corruption at various disaggregation levels. Using a convex combination structure in spatial econometrics, we decompose the overall effect of local corruption into a direct and an indirect effect and derive six novel empirical results. First, corruption has an economically and statistically significant negative effect on home city FDI inflows (the direct effect). Second, home city corruption has a significant and positive spillover effect on FDI inflows to competing cities (the indirect effect). Third, the direct effect is 16 times greater than the indirect effect, which leads to an overall negative effect of corruption on FDI. Fourth, the effect of corruption on FDI is heterogeneous across different FDI quantiles with the most pronounced effects being present in the lowest 80th percentile. Fifth, FDI inflows to the inland and lower-income cities are more sensitive to local corruption. Sixth, the indirect effect is more pronounced for cities within the same province.

Does public corruption affect analyst forecast quality?

Using U.S. Department of Justice (DOJ) data on corruption convictions of government officials, we study the effect of public corruption on analyst forecast quality. We find that analyst earnings forecasts for firms headquartered in more corrupt states are less accurate. Our results are robust to endogeneity checks and several alternative corruption measures. In our cross-sectional analysis, we find that the negative effect of corruption on analyst forecast accuracy is more pronounced in government contractor firms and firms with weaker internal governance or external monitoring. We further identify two channels through which corruption negatively influences analyst forecast accuracy: Firms in more corrupt states exhibit lower earnings quality and issue less frequent management guidance.

Addressing Corruption in Tertiary Institutions: Implications for Curriculum Development

This paper focuses on corruption in tertiary institutions and how it can be tackled through introducing courses and approaches via curriculum development that will build integrity among students, as well as, institutional quality through citizenship and social cohesion. The paper also discussed the concept of corruption, forms of corruption, causes and corruption in tertiary institutions such as bribery, fraud, embezzlement, favouritism, nepotism, among others and its implication for curriculum development in the country. In order to check and eliminate corruption in tertiary institutions, the paper recommended that, social studies, citizenship and value education should be implemented in tertiary institutions to teach about the negative effects of corruption and to create resilience against corrupt practices. Also, stakeholders in education should organize conferences in tertiary institution to re-orientate them on the dangers of corruption with the action statement ‘‘change begins with me’’ in our educational system, effective classroom implementation of curriculum content and the introduction of courses that will imbibe moral consciousness in the business of education at the tertiary level.

Corruption Trends and Graft Control Progress in Sierra Leone: Study of Causes and Remedies

Corruption continues to affect the vast majority of Sierra Leoneans and is regarded as the greatest culprit of poverty, inequality and social cohesion. This publication shed light on corruption trends, control measures, causes, development implications and remedies for combating corruption in Sierra Leone. The data for this article was sourced from secondary/desk review. The secondary data sources were mainly from published articles, government reports, Acts, policies, workshops and conference proceedings, newspaper commentary, Transparency International Annual Reports, Truth and Reconciliation Commission Reports, and NGOs among others. Key words like corruption in Sierra Leone, causes of corruption, negative effects of corruption and bribery, and control measures of corruption were used to search for relevant information. Specifically, the study revealed that corruption was more prevalent from 2003 to 2018 but declined from 2018 to 2021. Most corruption cases in Sierra Leone arise from the abuse of public offices for private gains. Furthermore, systemic analysis of literature showed that corruption arises as a result of low salary wages, political ambition and other sociological factors. From 2019 to 2021, Sierra Leone has made remarkable progress and is been rated below Africa’s corruption average. This might be attributed to the various reforms and the pre-conviction corrupt asset recovery strategy adopted and the massive public outreach and awareness-raising drive adopted by the commission. It is recommended that the Anti-Corruption Commission of Sierra Leone be adequately empowered to go after any individual engaged in corrupt practices regardless of social status, ethnicity, political connection and wealth. It further recommended that the Anti-Corruption Commissioner appointment should not be political but by integrity and sound track record of citizens.

Political corruption, Dodd–Frank whistleblowing, and corporate investment

We examine how political corruption affects corporate investment. We find firms in more corrupt states invest less than firms in less corrupt states. Our results are robust to using alternative investment measures, alternative corruption measures, and different regression specifications. Further, we find that the negative effect of corruption became insignificant after the enactment of Dodd–Frank Whistleblower Provision. The impact of the Dodd–Frank Whistleblower Provision is stronger in states with higher corruption. Our findings suggest that political corruption hinders investment, but the changes in legal environments can help firms reduce the decline in investments in highly corrupt states.

Corruption and Corporate Governance in Namibia: An Analysis of the Strategic Approaches in the 4TH Industrial Revolution

The advent of new technology and the 4th industrial revolution has introduced new facets of corporate crimes and regulatory challenges for the enforcement of anti-corruption laws. Acknowledging the negative effects of corruption on the private sector, corporate governance mechanisms may help reduce corruption in the private sector by ensuring that corporations are managed in the best interest of the corporation and the shareholders or investors. This article aims to evaluate the adequacy of the regulatory measures intended to promote good corporate governance in Namibia thereby cushioning the Namibian financial market from the negative effects of corporate corruption. It provides an exposition of the concepts corporate corruption and corporate governance by considering the relationship between the two. It further provides an analysis of the Namibian corporate governance regime and the anti-corruption legislative framework. It is submitted that if Namibia is to realise the financial market objectives set out in its policy documents, there is a need for the introduction of robust strategic approaches in corporate governance directed at curbing and/or reducing corporate corruption responsive to the 4th industrial revolution challenges, amongst others.

Corruption in Lebanon: An Exploratory Study About Lebanese Managers’ and Employees’ Perceptions

Corruption is one of the major factors which affects the development of the economic sector in Lebanon. The purpose of the present study was to investigate the ways in which the perceptions on corruption differed among managers and employees in Lebanese businesses. The study focused on the underlying assumptions made about corruption, the ways in which corruption affects business operations, and the preference for certain strategies to deal with corruption in the business sector. The study followed a quantitative approach relying on a web-based survey. The final valid sample consisted of 50 Lebanese managers and employees. The results showed a positive inclination toward the corrupt behaviour either due to social norms which tolerate corruption or as a result of high-performance expectations from superiors. In addition, findings showed large discrepancies in regard to the contribution of organizational norms to the proliferation of corruption in the business sector. In fact employees considered that managers often overlook and sometimes even encourage corrupt behaviours that allow the attainment of organizational goals. The study highlights that corruption is engrained in Lebanon and has become prevalent to high extent that business actors use corrupt practices to be able to perform their activities and maintain their competitiveness. The findings of the study stress the urgency for business practitioners to take immediate action to mitigate corrupted actions by introducing changes in the organizational culture. Stressing and encouraging ethical values to combat corruption is a priority for all business actors as well as for public policy makers. Mediation of corruption necessitates more public awareness campaigns disclosing the negative effects of corruption on the health of sound business and the economy of the country at large.

Economic growth and corruption in emerging markets: Does economic freedom matter?

This study analyzes the effects of corruption on economic growth for different levels of economic freedom. The effects of corruption on the economy, which can increase or decrease growth, were tested in emerging countries in Latin America and Pacific Asia, between 2000 and 2017, through one-step System-GMM estimation panel data regressions. The results showed that economic freedom works as a moderator in the relationship between corruption and economic growth. On both continents, greater economic freedom, on average, supports the growth of GDP per capita. In Latin America, it was possible to corroborate the hypothesis that corruption damages countries with greater economic freedom but favors economic growth in countries with lower economic freedom levels. Regarding the Asian countries studied, there was only a negative effect of corruption on economic growth in countries with less economic freedom. When comparing this reality with the one in Latin America, it was observed that in terms of development, the countries in this continent are in earlier stages compared to the Asian countries, even though both country groups are called “emerging.”

Does Corruption Lead to Lower Subnational Credit Ratings? Fiscal Dependence, Market Reputation, and the Cost of Debt

AbstractWhile studies show a consistent negative relationship between the level of corruption and range indicators of national-level economic performance, including sovereign credit ratings, we know less about the relationship between corruption and subnational credit ratings. This study suggests that federal transfers allow states with higher levels of corruption to retain good credit ratings, despite the negative economic implications of corruption more broadly, which also allows them to continue to borrow at low costs. Using data on corruption conviction in US states and credit ratings between 2001 and 2015, we show that corruption does not directly reduce credit ratings on average. We find, however, heterogeneous effects, in that there is a negative effect of corruption on credit ratings only in states that have a comparatively low level of fiscal dependence on federal transfers. This suggest that while less dependent states are punished by international assessors when seen as more corrupt, corruption does not affect the ratings of states with higher levels of fiscal dependence on federal revenue.

Development Of Organizational And Legal Framework In Combating Corruption In The Judicial System

The article examines the negative effect of corruption to the independence of judges and judicial system; factors, causing judiciary corruption; their types; organizational and legal aspects of combating and prevention of corruption; Anti-corruption measures, specifically deriving in accordance with peculiarities of the judicial system; reporting of judges; the raising needs in ensuring the transparency and openness of judicial activities; related international and foreign legislative laws; followed by analyzing the scientific and theoretical aspects of national legislation regulating the issue. Based on the results of analysis and research, the recommendations and proposals will be formulated with the aim of implementation of positive experience to the national legislation.

Corruption and Sponsor Value: An Event Study Analysis

Abstract: This study quantifies the negative effects of corruption on sponsors of the Indian Premier League (IPL) and presents unbiased sponsor-linked outcomes as its results. The event study methodology was used for the purpose of measuring the reaction of the Indian shareholders to the unexpected event that was the decision of the Supreme Court of India to ban two teams and several officials from cricketing affairs for life in response to the discovery of corruption. The results of this study show there is an immediate loss in firm value for sponsors that are linked to events and teams proved to be corrupt. The negative effects are larger for firms that are event sponsors, as compared to team sponsors. Some sponsors of non-corrupt teams also suffered damage due to the announcement of the Court; however, this effect was short-lived and wore off relatively quickly.

Does bribery sand or grease the wheels of firm level innovation: evidence from Latin American countries

This paper examines the effects of bribery on product and process innovation at the firm level in Latin American countries. We provide insights into the heterogeneous effects of bribery on the types of innovations across firms. Using the locality-sector average of bribe payments as a percentage of firm annual sales, we control for endogeneity bias, which is a recurring econometric problem in corruption-innovation studies. Overall, we find evidence to support the ‘sand the wheels’ hypothesis and argue that this negative effect is slightly higher in process innovation compared to product innovation. Using interaction terms to see the effects of bribery on different firm sizes and institutional structures, we find that bribery hurts firm innovation for micro and small firms, but not for large firms. The results also suggest that the negative effect of corruption on firm level innovation is stronger for firms in weak institutional environments than for firms in strong institutional settings. Practical interventions to promote strong institutional governance are not easy to arrange when corruption is endemic. Greater awareness of the extortionist environment of companies in these countries in the international community may bring pressures to bear for reform.

The Impact of Corruption on Economic Growth and Innovation in an Economy in Developed European Countries

<p>Theoretical background: The article explores the relationship between corruption and innovation in an economy and between corruption and economic growth. The multi-faceted and complex nature of corruption means that the impact of corruption on innovation and economic growth is unidirectional. There are arguments in the literature for both positive and negative effects of corruption on macroeconomic fiures. Most empirical research confirms the linear negative impact of corruption on economic growth. These results are the opposite of theoretical arguments that there may be both positive and negative consequences of corruption. Purpose of the article: The research aim is to analyse the theoretical aspects of the impact of corruption on selected macroeconomic variables. This goal was achieved by analysing the most signifiant arguments describing the relationships between chosen variables. Based on the literature analysis, research hypotheses were developed, and they were verifid in an empirical study. The results were analysed in the discussion section. Research methods: The study is based on a set of data on economically developed countries in Europe from 1996 to 2017. The empirical study was conducted using basic statistical measures – descriptive statistics and correlation coefficient, whereas econometric models were based on the GMM system (Generalized Method of Moments). Main findings: The results of this research show that the relationships between corruption and the measure of innovation, and corruption and economic growth are not linear. They take the form of a parabola. This means that the influence of corruption on innovation and economic growth is not the same for all levels of the corruption indicator. The relationship between corruption and economic growth is specific enough to show that a low level of corruption is economically justified from the point of view of empirical research. This is possible because corruption solves other economic problems, such as bureaucracy, which limits development. Corruption will support economic growth if the state does not work properly.</p>

Dampak Korupsi Terhadap Pertumbuhan Ekonomi: Studi Kasus 4 Negara di ASEAN

Today the phenomenon of the influence of corruption to economic growth has been a fairly hot issue of debate, both theoretically and empirically. The research uses a data panel analysis with a Random Effect Model approach to determine if corruption has a negative impact on economic growth in 4 ASEAN countries over the period of 2004-2015. Analysis results show that variable corruption has a negative influence on economic growth despite being insignificant, while other variables that have a significant positive influence on economic growth are public investments. The results of this study confirm that the negative effects of corruption do not directly affect economic growth but rather lead to the inefficiencies of production processes and the misallocation of resources.

If you're corrupt, you'd better be free

PurposeThis study aims to investigate if the level of economic freedom matters for how corruption affects per capita income in US states.Design/methodology/approachUsing a new (and novel) index of corruption, which is based on Associated Press news wires, the author estimates the long-run cointegrating relationship between corruption, economic freedom and per capita income with fully modified ordinary least squares (FMOLS) following Pedroni (2000).FindingsThe author finds that there is a threshold level of economic freedom that determines if corruption reduces the per capita income in a state. According to the FMOLS estimations, the negative effects of corruption on income decrease as economic freedom increases, and they eventually disappear.Originality/valueThis is the first study investigating the intricate relationship between corruption, economic freedom and economic performance using data from US states. The study uses a news-based measure of corruption constructed by Dincer and Johnston (2017), which has several advantages over the convictions-based measure used in previous studies analyzing the relationship between corruption and growth using US data. The study takes into account the integration and cointegration properties of the data and estimates the relationship among the cointegrated variables using FMOLS following Pedroni (2000).

Corruption in public health and its effects on the economic growth of Brazilian municipalities.

This study's objective is to estimate the effects of corruption in the public health sector on the economic growth of Brazilian municipalities. To build three corruption measures, data from audits conducted by the office of the comptroller general (Controladoria Geral da Uniao, CGU henceforth) in 2009 and 2010 in the health and sanitation sectors were used. Two analysis steps were performed. The first verified the relationship between the performance of the audit and the economic growth rate of the municipalities, using the Ordinary Least Squares (OLS); the second analyses the effects of corruption on public health on the economic growth of the audited municipalities, using OLS and Quantile Regressions. First, in a sample of 5547 municipalities, the evidence indicates that being audited is related to slower economic growth. From this, when the sample is restricted to the 180 municipalities audited in 2009 and the corruption variables constructed from the audit reports conducted in the year, the results indicate negative effects of corruption on economic growth. The results show that in the larger quantiles of economic growth, the adverse effects of corruption are felt more significantly. Both methods tested with the three corruption variables created provide similar evidence, showing robustness of results. Therefore, the study allowed us to conclude that corruption in the public health sector hampered the economic growth of Brazilian municipalities, which is a delayed effect: Corruption in 2009 had negative effects on growth in 2011.

КОРУПЦІЙНІ РИЗИКИ У СФЕРІ ПУБЛІЧНИХ ЗАКУПІВЕЛЬ ТА ШЛЯХИ ЇХ МІНІМІЗАЦІЇ

The article describes current aspects of the functioning of national public procurement system after the signing of the Association Agreement with the European Union and the introduction of new tender legislation. It is identified and desribed the impact of public procurement on socio-economic processes in the country through the implementation of their special functions. The negative effect of corruption in tender processes, which lead to financial, quantitative, qualitative and political losses for the country, is generalized. The problem of further existence of corruption in the field of public procurement is highlighted and its current level after the introduction of new approaches and tools is assessed. The main types of corruption offenses in the tender area, which are associated with the receipt of illegal benefits, bribery, using of financial resources intended for public procurement for personal gain or enrichment are identified. Based on the assessment of functional component of public procurement and analysis of the organizational mechanism of their conduct, identified corruption risks that arise at the stage of preparation of tenders, qualifications of their participants, execution of the order; singled out and detailed іndicators of corruption risks. They are determined by motivated lobbying to intensify of using of public procurement in a certain economic activity, manipulation of procurement volumes and necessary financial resources, secret agreements, using hidden elements of discrimination, unreasonable preferences for individual participants, and unsystematic selection of the tender winner. The ways of minimizing corruption risks, which provide a combination of psychological, technical, regulatory and repressive methods are generalized. Potential of novelties of modern tender legislation from the position of counteraction to corruption manifestations and strengthening of influence of regulatory and repressive means of their minimization is estimated. The need to further intensify the activities of regulatory and law enforcement agencies as institutions that are formed to implement the repressive component of combating corruption in the field of public procurement is identified.

Does Corruption in Exporter and Importer Country Influence International Trade?

ABSTRACT We investigate whether bilateral exports of goods flowing from Vietnam to its 46 top trading partners are affected by corruption over the period 2000–2014. We capture the effects of corruption of Vietnam and her trade partners, separately using the corruption perception index (CPI) developed by Transparency International. The CPI captures both bureaucratic and political corruption perceptions. Our key results are as follows. We find that corruption in Vietnam has discouraged its bilateral export flows. The negative effect of corruption is highly significant in the long-run. In driving Vietnam’s exports, perceptions of corruption in Vietnam are found to be more potent than perceptions in importer countries. We find that the sign effects of corruption in Vietnam or trading partner countries (or importers) are not dependent on whether trading partners are developed or developing. However, we do find that corruption discourages developing countries more than developed countries from importing goods from Vietnam. We confirm the robustness of our results using the control of corruption (COC) measure of corruption extracted from the World Bank Database.

Corruption and international trade: a comprehensive analysis with gravity

PurposeThe purpose of this paper is to analyze the impact of corruption on trade.Design/methodology/approachThe authors estimate gravity equations with the last econometric advances on a wide sample of countries and years using three different measures of corruption. Two of them belong to the so-called perception-based indexes and the third is derived from a structural model that takes into account the causes and indicators of corruption across countries.FindingsA negative effect of corruption on trade appears with perceptions, but it is not widespread. However, the authors find sensible evidence of the “grease the wheels” view with the structural index if low and middle income countries are implicated. Additionally, when using this measure, differences in corruption levels negatively impact trade. Both results are in line with expectations.Originality/valueMoreover, membership in regional trade agreements does not seem to significantly alter these results.