Corruption and Firm Performance: Evidence from Greek Firms

International Journal of Economic Sciences and Applied Research, Vol. 5, Issue 2, pp. 43-67

25 Pages Posted: 3 Oct 2012 Last revised: 28 Mar 2013

See all articles by Daphne Athanasouli

Daphne Athanasouli

Independent

Antoine Goujard

Independent

Pantelis Sklias

Dept. of Political Science & International Relations, University of Peloponnese, Corinth, Greece

Date Written: October 2, 2012

Abstract

This article investigates the relationship between corruption and firm performance in Greece using firm level data. Corruption is overall negatively associated with firm size and growth at the firm level. We focus on the effect of ‘administrative corruption’, whereby firms engage in corrupt practices and bribery of government officials. We contrast the firm experience of corruption and the contextual experience of corruption at the sectoral level and find that the latter, contextual corruption is more important. The contextual effect of corruption identifies the magnitude of systemic corruption in Greece, indicating the need for reforms in an institutional environment that allows corrupt practices. Furthermore, firms of different size appear differently affected by corruption. This suggests that firm engagement in corruption is heterogeneous. Using quantile regressions, small and medium firms display a higher engagement in corrupt practices. However, their performance is less correlated with corruption than that of large firms.

Keywords: bribery, corruption, growth, firm size, Greece

JEL Classification: D73, O17, M21

Suggested Citation

Athanasouli, Daphne and Goujard, Antoine and Sklias, Pantelis, Corruption and Firm Performance: Evidence from Greek Firms (October 2, 2012). International Journal of Economic Sciences and Applied Research, Vol. 5, Issue 2, pp. 43-67. Available at SSRN: https://ssrn.com/abstract=2155589

Antoine Goujard

Independent ( email )

Pantelis Sklias

Dept. of Political Science & International Relations, University of Peloponnese, Corinth, Greece ( email )

Corinth
Greece

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