Corruption, political discretion and entrepreneurship
ISSN: 1525-383X
Article publication date: 18 May 2018
Issue publication date: 12 July 2018
Abstract
Purpose
While common sense suggests that corruption will likely have a negative impact on the economy as it raises the cost of doing business, research on the topic showed inconsistent results (positive, negative and neutral). This paper aims to verify whether corruption has a “grease” or “sand” effect on the wheels of entrepreneurial rates and under which conditions corruption will have stronger or weaker effects.
Design/methodology/approach
Using institutional theory as the basis for the hypotheses, generalized least squares estimation is conducted to empirically examine the role of corruption and political discretion in entrepreneurship in a sample of 93 countries.
Findings
Countries with higher levels of corruption are associated with lower levels of firm creation. However, this negative effect of corruption is weaker when there are higher levels of political discretion.
Originality/value
This is the first evaluation of the moderating effect of political discretion on the negative impact of corruption on entrepreneurship.
Keywords
Acknowledgements
The author is grateful to Dr Chang Hoon Oh, the Editor of Multinational Business Review, for his unique assessment that makes this article a reality. The author thanks blind reviewers for their sound judgment; no doubt, the absence of their critiques would have blurred the overall contribution of this paper. The author would also like to thank Dr Ana Colovic, a Professor of Strategy and Entrepreneurship at NEOMA Business School in France, who provided great insights, which improved this research work.
Citation
Jiménez, A. and Alon, I. (2018), "Corruption, political discretion and entrepreneurship", Multinational Business Review, Vol. 26 No. 2, pp. 111-125. https://doi.org/10.1108/MBR-01-2018-0009
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited