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1 – 6 of 6Beatrice D. Simo-Kengne and Siphiwo Bitterhout
The theoretical debate of corruption's impact on economic growth remains unsettled, making it an empirical question. This study aims to investigate corruption's effect on BRICS…
Abstract
Purpose
The theoretical debate of corruption's impact on economic growth remains unsettled, making it an empirical question. This study aims to investigate corruption's effect on BRICS countries' economic growth.
Design/methodology/approach
A panel dataset on BRICS countries spanning 1996 to 2020 was used. Bias-corrected estimators in small dynamic panels were employed to estimate a growth model as a linear-quadratic function of corruption that accounts for cross-sectional dependence, endogeneity and unobserved heterogeneity due to country and time-specific characteristics.
Findings
The results indicate that corruption is detrimental to economic growth in BRICS countries; the quadratic relationship implies corruption is less prevalent in some countries than others. Thus, governments of BRICS countries are encouraged to embark on anti-corruption policies to boost their economic performance.
Originality/value
An important limitation of corruption studies is the difficulty in measuring real corruption experiences due to the secretive nature of corruption and the fact that corruption is known not to leave a paper trail. For the uncertainty of the index estimates, the analysis used a continuous corruption composite score measuring the standard deviation of the extent to which public power is exercised for public gain. Furthermore, estimation and inference are robust to small dynamic panels with a general form of cross-sectional dependence.
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Folorunsho M. Ajide and John A. Olayiwola
In this paper, we investigate the impact of remittances on control of corruption in Nigeria for a period of 1986–2016.
Abstract
Purpose
In this paper, we investigate the impact of remittances on control of corruption in Nigeria for a period of 1986–2016.
Design/methodology/approach
The study uses ARDL modeling framework, dynamic OLS estimation, variance decomposition and impulse response analysis to examine the relationship between the two variables.
Findings
The study finds that remittances significantly improve the control of corruption in Nigeria. We further examine the robustness test of the results using dynamic OLS estimation, variance decomposition and impulse response analysis. Our results remain significant and consistent to the earlier one reported in ARDL framework which supports the extant literature.
Practical implications
Our study suggests that international remittances can be used, through the cross-border transfer of norms and practices, to significantly impact the socioeconomic progresses of a country by reducing corruption.
Originality/value
The existing studies on the relationship between corruption and remittances document conflicting results. In addition, study on corruption - remittances nexus that specifically focuses on any African country is largely absent despite the fact that most of the countries in the region are recognized as highly corrupt. This paper provides insights on how remittances can be used as part of tool kits to control corruption in African nation.
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Ferdinando Ofria and Massimo Mucciardi
The purpose is to analyze the spatially varying impacts of corruption and public debt as % of GDP (proxies of government failures) on non-performing loans (NPLs) in European…
Abstract
Purpose
The purpose is to analyze the spatially varying impacts of corruption and public debt as % of GDP (proxies of government failures) on non-performing loans (NPLs) in European countries; comparing two periods: one prior to the crisis of 2007 and another one after that. The authors first modeled the NPLs with an ordinary lest square (OLS) regression and found clear evidence of spatial instability in the distribution of the residuals. As a second step, the authors utilized the geographically weighted regression (GWR) to explore regional variations in the relationship between NPLs and the proxies of “Government failures”.
Design/methodology/approach
The authors first modeled the NPL with an OLS regression and found clear evidence of spatial instability in the distribution of the residuals. As a second step, the author utilized the Geographically Weighted Regression (GWR) (Fotheringham et al., 2002) to explore regional variations in the relationship between NPLs and proxies of “Government failures” (corruption and public debt as % of GDP).
Findings
The results confirm that corruption and public debt as % of GDP, after the crisis of 2007, have affected significantly on NPLs of the EU countries and the following countries neighboring the EU: Switzerland, Iceland, Norway, Montenegro, and Turkey.
Originality/value
In a spatial prospective, unprecedented in the literature, this research focused on the impact of corruption and public debt as % of GDP on NPLs in European countries. The positive correlation, as expected, between public debt and NPLs highlights that fiscal problems in Eurozone countries have led to an important rise of problem loans. The impact of institutional corruption on NPLs reports that the higher the corruption, the higher is the level of NPLs.
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Xiaofang Ma, Wenming Wang, Gaoguang Zhou and Jun Chen
This study aims to take advantage of the unprecedented anti-corruption campaign launched in China in December 2012 and examine the effect of improved public governance on…
Abstract
Purpose
This study aims to take advantage of the unprecedented anti-corruption campaign launched in China in December 2012 and examine the effect of improved public governance on tunneling.
Design/methodology/approach
This study uses a sample of Shanghai and Shenzhen Stock Exchange listed companies from 2010 to 2014 and conduct regression analyses to investigate the effect of improved public governance attributed to the anti-corruption campaign on tunneling.
Findings
This study finds that the level of tunneling decreased significantly after the anti-corruption campaign, suggesting that increased public governance effectively curbs tunneling. Cross-sectional results show that this mitigating effect is more pronounced for non-SOE firms, especially non-SOE firms with political connections, firms audited by non-Big 8 auditors, firms with a large divergence between control rights and cash flow rights and firms located in areas with lower marketization.
Practical implications
This study highlights the importance of anti-corruption initiatives in improving public governance and in turn reducing tunneling. This study provides important implications for many other emerging economies to improve public governance.
Originality/value
This study contributes to the literature on the role of public governance in constraining corporate agency problems and advances the understanding of the economic consequences of China's anti-corruption campaign in the context of tunneling.
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Eleftherios Giovanis and Oznur Ozdamar
Effective business and investment climate can lead to a higher rate of investment, profits and improved productivity, through the creation of an institutional environment, where…
Abstract
Purpose
Effective business and investment climate can lead to a higher rate of investment, profits and improved productivity, through the creation of an institutional environment, where the state provides high-quality public goods. This study aims to explore the impact of the business–investment climate on firm performance in a sample of six countries in the Middle East and North Africa (MENA) region and Turkey. Furthermore, we extend our analysis to explore the impact of business–investment climate on the resource misallocation in Egypt and Turkey.
Design/methodology/approach
The study used fixed effects models to investigate the relationship between the business and investment climate, expressed by the obstacles in state–business relations- and the firm performance, which is measured by the firm's value-added, the labour productivity and the total factor productivity To reduce the endogeneity coming from possible reverse causality and the perceptions about the business climate, an instrumental variables (IV) approach applying the two-stage least squares (2SLS) method was followed. The empirical analysis relies on data derived from the World Bank Enterprise Surveys.
Findings
Based on estimates, the obstacles in business climate may reduce the firm performance measures by 15–40%. These findings indicate the importance of quality in the business climate and how the improvement in its efficiency can have a very considerable positive impact on firms' performance and thus on the overall economic growth of a country.
Originality/value
This is the first study exploring the impact of business–investment climate on various measures of the firm performance and the resource misallocation in a large sample of countries in the MENA region.
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Mesbah Fathy Sharaf and Abdelhalem Mahmoud Shahen
This paper investigates the asymmetric impact of the real effective exchange rate (REER) on Egypt's real domestic output from 1960 to 2020.
Abstract
Purpose
This paper investigates the asymmetric impact of the real effective exchange rate (REER) on Egypt's real domestic output from 1960 to 2020.
Design/methodology/approach
A Nonlinear Autoregressive Distributed Lag (NARDL) model is utilized to isolate real currency depreciations from appreciations and account for the potential asymmetry in the impact of the REER. The analyses account for the various channels via which the REER could affect domestic output.
Findings
Results show evidence of a long-run asymmetry in the output effect of REER changes in which only real currency depreciations have a contractionary impact on output, while the REER has no impact on output in the short run.
Practical implications
The Egyptian monetary authority cannot rely on domestic currency depreciation as a policy instrument to boost domestic output.
Originality/value
Unlike most of the previous studies, which assume linearity in the impact of the REER on output, we relax this assumption and hypothesize that the REER changes have an asymmetric effect on the Egyptian domestic output in Egypt. We use a long time span from 1960 to 2020 and control for the potential structural breaks in the REER-output nexus and the various channels through which the REER can affect domestic output.
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