PL EN


2020 | 54 | 2 |
Article title

The Impact of Corruption on Economic Growth and Innovation in an Economy in Developed European Countries

Authors
Content
Title variants
Languages of publication
EN
Abstracts
EN
Theoretical background: The article explores the relationship between corruption and innovation in an economy and between corruption and economic growth. The multi-faceted and complex nature of corruption means that the impact of corruption on innovation and economic growth is unidirectional. There are arguments in the literature for both positive and negative effects of corruption on macroeconomic figures. Most empirical research confirms the linear negative impact of corruption on economic growth. These results are the opposite of theoretical arguments that there may be both positive and negative consequences of corruption.Purpose of the article: The research aim is to analyse the theoretical aspects of the impact of corruption on selected macroeconomic variables. This goal was achieved by analysing the most significant arguments describing the relationships between chosen variables. Based on the literature analysis, research hypotheses were developed, and they were verified in an empirical study. The results were analysed in the discussion section.Research methods: The study is based on a set of data on economically developed countries in Europe from 1996 to 2017. The empirical study was conducted using basic statistical measures – descriptive statistics and correlation coefficient, whereas econometric models were based on the GMM system (Generalized Method of Moments).Main findings: The results of this research show that the relationships between corruption and the measure of innovation, and corruption and economic growth are not linear. They take the form of a parabola. This means that the influence of corruption on innovation and economic growth is not the same for all levels of the corruption indicator. The relationship between corruption and economic growth is specific enough to show that a low level of corruption is economically justified from the point of view of empirical research. This is possible because corruption solves other economic problems, such as bureaucracy, which limits development. Corruption will support economic growth if the state does not work properly.
PL
Theoretical background: The article explores the relationship between corruption and innovation in an economy and between corruption and economic growth. The multi-faceted and complex nature of corruption means that the impact of corruption on innovation and economic growth is unidirectional. There are arguments in the literature for both positive and negative effects of corruption on macroeconomic fiures. Most empirical research confirms the linear negative impact of corruption on economic growth. These results are the opposite of theoretical arguments that there may be both positive and negative consequences of corruption. Purpose of the article: The research aim is to analyse the theoretical aspects of the impact of corruption on selected macroeconomic variables. This goal was achieved by analysing the most signifiant arguments describing the relationships between chosen variables. Based on the literature analysis, research hypotheses were developed, and they were verifid in an empirical study. The results were analysed in the discussion section. Research methods: The study is based on a set of data on economically developed countries in Europe from 1996 to 2017. The empirical study was conducted using basic statistical measures – descriptive statistics and correlation coefficient, whereas econometric models were based on the GMM system (Generalized Method of Moments). Main findings: The results of this research show that the relationships between corruption and the measure of innovation, and corruption and economic growth are not linear. They take the form of a parabola. This means that the influence of corruption on innovation and economic growth is not the same for all levels of the corruption indicator. The relationship between corruption and economic growth is specific enough to show that a low level of corruption is economically justified from the point of view of empirical research. This is possible because corruption solves other economic problems, such as bureaucracy, which limits development. Corruption will support economic growth if the state does not work properly.
Year
Volume
54
Issue
2
Physical description
Dates
published
2020
online
2020-06-29
Contributors
author
References
  • Aghion, P., & Akcigit, U., & Cagé, J., & Kerr, W. (2016). Taxation, corruption, and growth. European Economic Review, 86. doi:10.1016/j.euroecorev.2016.01.012.
  • Ahmad, E., & Ullah, M., & Arfeen, M. (2012). Does corruption affect economic growth? Latin American Journal of Economics, 49(2). doi:10.2307/41959246.
  • Anokhin, S., & Schulze, W. (2009). Entrepreneurship, innovation, and corruption, Journal of Business Venturing, 24(5). doi:10.1016/j.jbusvent.2008.06.001.
  • Cieślik, A., & Goczek, Ł. (2015). On the evolution of corruption patterns in the post-communist countries. Equilibrium, 10(1). doi:0.12775/EQUIL.2015.002.
  • Cieślik, A., & Goczek, Ł. (2018). Control of corruption, international investment, and economic growth–Evidence from panel data. World Development, 103. doi: 10.1016/j.worlddev.2017.10.028.
  • Cuervo-Cazurra, A. (2006). Who cares about corruption? Journal of International Business Studies, 37(6). doi:10.1057/palgrave.jibs.8400223.
  • Drury, C., & Krieckhaus, J., & Lusztig, M. (2006). Corruption, Democracy, and Economic Growth, International Political Science Review, 27(2). doi: 10.1177/0192512106061423.
  • Jain, P., & Kuvvet, E., & Pagano, M. (2017). Corruption’s impact on foreign portfolio investment. International Business Review, 26(1). doi:10.1016/j.ibusrev.2016.05.004.
  • Lau, K., & Yang, S., & Zhang, Z., & Leung, V. (2015). Determinants of innovative activities: Evidence from Europe and central Asia region, The Singapore Economic Review, 60(1). doi: 10.1142/S0217590815500046.
  • Méndez, F., & Sepúlveda, F. (2006). Corruption, growth and political regimes: Cross country evidence. European Journal of Political Economy, 22(1). doi: 10.1016/j.ejpoleco.2005.04.005.
  • Méon, G., & Sekkat K. (2005). Does corruption grease or sand the wheels of growth?. Public choice, 122(1-2). doi: 10.1007/s11127-005-3988-0.
  • Mo, P. (2001) Corruption and Economic Growth, Journal of Comparative Economics, vol. 29, pp. 66-79. doi: 10.1006/jcec.2000.1703.
  • Nelson, R., & Pack, H. (1999). The Asian Miracle and Modern Growth Theory, The Economic Journal, 109(457). doi: 10.1111/1468-0297.00455.
  • O’Toole, C. M., & Tarp, F. (2014). Corruption and the effiiency of capital investment in developing countries. Journal of International Development, 26(5), 567–597. doi:10.1002/jid.2997
  • Shera, A., & Dosti, B., & Grabova, P. (2014). Corruption impact on Economic Growth: An empirical analysis, Journal of Economic Development, Management, IT, Finance and Marketing, 6(2).
  • Pastusiak, R. (2012). Wpływ innowacji na dynamikę wzrostu gospodarczego w modelowaniu ekonomicznym na przykładzie specjalnych stref ekonomicznych. Acta Universitatis Lodziensis, 266.
  • Pope, J. (1999). Rzetelność życia publicznego, Instytut Spraw Publicznych, Warszawa.
  • Wright, A., & Craigwell, R. (2013). Economic growth and corruption in developing economies: Evidence from linear and non-linear panel causality tests, Journal of Business, Finance and Economics in Emerging Economies, 8(2).
Document Type
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.ojs-doi-10_17951_h_2020_54_2_77-87
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.