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Corruption and corporate investment efficiency around the world

Corruption and corporate investment efficiency around the world The paper investigates the effect of corruption on corporate investment efficiency around the world.Design/methodology/approachThe sample includes 218,350 observations from 30,074 firms across 42 countries. The authors measure corruption based on the Corruption Perception Index (CPI) from Transparency International, Corruption Control Index (CCI) from the World Bank and Corruption Index from the International Country Risk Guide.FindingsThe authors find that corruption is negatively related to investment efficiency. The robustness checks with different measures of corporate investment and alternative regression approaches show consistent findings. Moreover, the authors also find that the effect of corruption is stronger (weaker) in strong (weak) shareholder protection countries.Originality/valueThe paper has two important contributions to the literature. First, it shows that corruption environment is also a determinant of corporate investment efficiency. Second, legal protection of shareholders can mitigate the negative effect of corruption on corporate investment efficiency. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Journal of Management and Business Economics Emerald Publishing

Corruption and corporate investment efficiency around the world

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Corruption and corporate investment efficiency around the world

Nguyen, Xuan Minh; Tran, Quoc Trung
European Journal of Management and Business Economics , Volume 31 (4): 14 – Sep 21, 2022

Abstract

The paper investigates the effect of corruption on corporate investment efficiency around the world.Design/methodology/approachThe sample includes 218,350 observations from 30,074 firms across 42 countries. The authors measure corruption based on the Corruption Perception Index (CPI) from Transparency International, Corruption Control Index (CCI) from the World Bank and Corruption Index from the International Country Risk Guide.FindingsThe authors find that corruption is negatively related to investment efficiency. The robustness checks with different measures of corporate investment and alternative regression approaches show consistent findings. Moreover, the authors also find that the effect of corruption is stronger (weaker) in strong (weak) shareholder protection countries.Originality/valueThe paper has two important contributions to the literature. First, it shows that corruption environment is also a determinant of corporate investment efficiency. Second, legal protection of shareholders can mitigate the negative effect of corruption on corporate investment efficiency.

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Publisher
Emerald Publishing
Copyright
© Xuan Minh Nguyen and Quoc Trung Tran
ISSN
2444-8451
DOI
10.1108/ejmbe-11-2020-0321
Publisher site
See Article on Publisher Site

Abstract

The paper investigates the effect of corruption on corporate investment efficiency around the world.Design/methodology/approachThe sample includes 218,350 observations from 30,074 firms across 42 countries. The authors measure corruption based on the Corruption Perception Index (CPI) from Transparency International, Corruption Control Index (CCI) from the World Bank and Corruption Index from the International Country Risk Guide.FindingsThe authors find that corruption is negatively related to investment efficiency. The robustness checks with different measures of corporate investment and alternative regression approaches show consistent findings. Moreover, the authors also find that the effect of corruption is stronger (weaker) in strong (weak) shareholder protection countries.Originality/valueThe paper has two important contributions to the literature. First, it shows that corruption environment is also a determinant of corporate investment efficiency. Second, legal protection of shareholders can mitigate the negative effect of corruption on corporate investment efficiency.

Journal

European Journal of Management and Business Economics – Emerald Publishing

Published: Sep 21, 2022

Keywords: Corruption; Investment efficiency; Investment; G32; G34

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