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Corruption, Bureaucracy and Firm Productivity in A frica
Author(s) -
Faruq Hasan,
Webb Michael,
Yi David
Publication year - 2013
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12019
Subject(s) - bureaucracy , productivity , tobit model , language change , economics , quality (philosophy) , ordinary least squares , labour economics , econometrics , macroeconomics , political science , politics , law , art , philosophy , literature , epistemology
This paper estimates the impact of corruption and poor bureaucratic quality on firm productivity for a unique dataset with firm‐specific data of more than 900 firms over 12 years for G hana, K enya and T anzania. We first discuss why poor bureaucratic quality and, especially, corruption are expected to have negative impacts on firm productivity. We then employ Data E nvelopment Analysis to estimate firm productivity and pooled OLS and Tobit regression analysis to estimate the effects of corruption and bureaucratic quality on firm productivity. We find that less productive firms are more likely to engage in corrupt activities; both poor bureaucratic quality and corruption reduce firm productivity; and corruption has a greater negative impact on productivity.