The effect ofcormption on firm innovation in emerging markets
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2024-07-11
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en
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This research aimed to investigate the effects of corruption on firm innovation in emerging markets, examining whether corruption functions as a "sanding" (beneficial) or "greasing" (harmful) effect. Given the conflicting findings in previous studies, this study sought to clarify the relationship and provide insights into how corruption influences innovative activities within firms. Data were collected from the World Bank's Enterprise Survey, with a final sample of 20,333 firms, across 10 emerging markets. A binary logistic regression was employed to assess the impact of corruption on firm innovation, using institutional quality and managerial experience as moderating variables. The findings indicate that bribery positively influences new product innovation, supporting the notion that firms engaging in bribery are more likely to innovate. However, higher institutional quality diminishes this positive effect, while managerial experience does not significantly impact the relationship between bribery and innovation. These results highlight the complex interplay between corruption, institutional factors, and firm innovation. Policymakers should focus on improving institutional quality to mitigate the perceived benefits of corruption, while managers must weigh the ethical implications of engaging in corrupt practices, as these may undermine employee trust and negatively affect organizational performance.
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Faculteit der Managementwetenschappen