Corruption, provincial institutions and manufacturing firm productivity: New evidence from a transitional economy

  • Tran Quang Tuyen Faculty of Political Economy, University of Economics and Business, Vietnam National University, Hanoi.
  • Vu Van Huong Department of Economics, Academy of Finance, Hanoi, Vietnam.
  • Doan Thanh Tinh Faculty of Political Economy, University of Economics and Business, Vietnam National University, Hanoi and the University of Waikato, Hamilton, New Zealand
  • Tran Duc Hiep Faculty of Political Economy, University of Economics and Business, Vietnam National University, Hanoi

Abstract

Using data from nationwide surveys of provincial institutions and private manufacturing small medium enterprises, this study provided the first evidence of the impact of provincial institution quality and firms’ participation in and intensity of corrupt activities on firm productivity in Vietnam. We found that the bribe intensity instead of whether firms bribed state officials or not (measured by a dummy variable) has a negative effect on firm productivity when the endogeneity of corruption and unobservable characteristics are controlled for. This finding contrasts to a popular belief about a paradox for East Asian countries where corruption is positively associated with firm growth.
Keywords Corruption, firm productivity, SMEs, Vietnam
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How to Cite
Tuyen, T., Huong, V., Tinh, D., & Hiep, T. (2016). Corruption, provincial institutions and manufacturing firm productivity: New evidence from a transitional economy. Estudios de Economía, 43(2), pp. 199-215. Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/44116/46128
Section
Articles
Published
2016-11-21