CORRUPTION IN THE BUSINESS ENVIRONMENT: ISSUES OF FINANCIAL CONSTRAINTS IN FIRM LEVEL
Keywords:corruption, financial constraints, sales growth, employment growth
The issue of corruption is important to politicians, citizens, and firms. Since the early 1990s, a large number of studies have sought to understand the causes and consequences of corruption employing firm-level survey data from various countries. While insightful, these analyses have largely ignored the impact of firm-level financial constraints and corruption in the business environment. Our study shows that financial constraints negatively affect both firm sales growth and employment growth while corruption has no direct impact on growth. The analysis provides important insight both for academics and practitioners.
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