Transnational corruption and innovation in transition economies

Habiyaremye, Alexis and Raymond, Wladimir (2013). Transnational corruption and innovation in transition economies. UNU-MERIT.

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UNU-MERIT Working Papers

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  • Author Habiyaremye, Alexis
    Raymond, Wladimir
    Title Transnational corruption and innovation in transition economies
    Publication Date 2013
    Publisher UNU-MERIT
    Abstract In this paper, we examine how transnational corruption affects host country firms' innovation behaviour and performance in transition economies of Eastern Europe and Central and Western Asia. Using firm-level data from the Business Environment and Enterprise Performance Survey, we show that the involvement of foreign firms in corruption practices reduces the propensity of firms in host countries to invest in research and development and harms their ability to improve their existing products and services. Using a simultaneousequations recursive model and controlling for various innovation determinants, we also show that the reduction in innovation effort ultimately also hurts the host country's long-term ability to successfully bring new products on the market through indirect effects.
    Keyword Transnational corruption
    Innovation
    Transition economies
    JEL H42
    H57
    L26
    O31
    P37
    Copyright Holder UNU-MERIT
    Copyright Year 2013
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    Created: Wed, 11 Dec 2013, 17:15:43 JST