Open AccessEffect of corruption on firm level innovation: Evidence from Pakistan
Author(s) -
Syed Muhammad Imran,
Hafeez ur Rehman,
Rana Ejaz Ali Khan
Publication year - 2020
Publication title -
economics and business letters
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.197
H-Index - 4
ISSN - 2254-4380
DOI - 10.17811/ebl.9.1.2020.41-47
Subject(s) - language change , phenomenon , proxy (statistics) , macro level , micro level , business , macro , economics , monetary economics , economic system , microeconomics , economic impact analysis , art , physics , literature , quantum mechanics , machine learning , computer science , programming language
Corruption is a widespread phenomenon in majority of the developing countries. However, literature evident both positive and negative impact of corruption in economises at macro level. At the micro level the studies rarely exist explaining this phenomenon. This paper empirically investigates the micro level impact of corruption on firms’ innovation. For the purpose, we use “percent of firms expected to give gifts to public officials (to get things done)” as a proxy for corruption, and innovation is measured by “firms that introduce new or significantly improved products or services over the last three years”. The results explain that corruption augments firms’ innovation, that is, “grease the wheels” exists in the case of Pakistan.