The impact of corruption on the performance of newly established enterprises : empirical evidence from a transition economy
Date
12/2020Keywords
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Abstract
This paper investigates the effects of corruption on the performance of newly established enterprises. Using longitudinal data from enterprise surveys containing virtually all firms over the period from 2011 to 2015 in Vietnam, we find that corruption deteriorates firm financial performance, and subsequently exposes them to a greater failure probability. We further find that, while corruption imposes more harmful effects on the performance and survival of private domestic firms, it exerts no significant impact on state-owned firms. On the other hand, foreign firms are also able to take advantage of corruption to enhance their performance and survivability. In addition, our results suggest that the more mature firms are better at dealing with corruption and can eventually take advantage of it to enhance their performance. The results are robust after various model specifications as well as alternative classifications of newly established firms.
Citation
Nam , V H , Luu , H N , Nguyen , M N & Nguyen , D A 2020 , ' The impact of corruption on the performance of newly established enterprises : empirical evidence from a transition economy ' , Borsa Istanbul Review , vol. 20 , no. 4 , pp. 383-395 . https://doi.org/10.1016/j.bir.2020.05.006
Publication
Borsa Istanbul Review
Status
Peer reviewed
ISSN
2214-8450Type
Journal article
Rights
Copyright © 2020, Borsa Istanbul Anonim Sirketi. Production and hosting by Elsevier B.V. This is an open access article under the CC BY-NC-ND license.
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