Corruption’s Effect on Business Venturing within the U.S. States
American Journal of Economics and Sociology, Vol. 68, No. 5, p. 1136, November 2009
18 Pages Posted: 13 Nov 2010
Date Written: May 10, 2009
ABSTRACT. In developing countries with high levels of corruption, people are often forced into small-business venturing or survivalist entrepreneurship because larger, more efficient firms do not exist. In developed countries, however, low corruption means that people choose entrepreneurship as a better means of innovating. In this article we use federal convictions of state and local officials and the Small Business Administration’s firm formation data to test whether corruption within the United States forces some people into business venturing. We find that business venturing within the United States is caused in part by corruption.
Keywords: Corruption, Entrepreneurship, Business Venturing
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