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- Title
Corruption and destructive entrepreneurship.
- Authors
Boudreaux, Christopher J.; Nikolaev, Boris N.; Holcombe, Randall G.
- Abstract
The negative effects of corruption at the macro level are well-documented. Corruption reduces economic growth, lowers investment, and erodes trust in government officials, creating an institutional environment that pushes entrepreneurs from productive to destructive activities. Corruption also has effects at the micro level because some industries are better situated to profit from corruption than others. Corruption not only lowers economic output but also shifts resources toward some industries and away from others. Using federal convictions in the USA as a measure of corruption, regression results show that increased corruption shifts resources toward the construction industry and away from the education industry and professional, scientific, and technical service industry. The evidence also shows that the distance from state capitals and voter turnout moderate the relationship between corruption and firm concentrations.
- Subjects
POLITICAL corruption -- Economic aspects; ENTREPRENEURSHIP; ECONOMIC development; INVESTMENTS; PRODUCTION (Economic theory)
- Publication
Small Business Economics, 2018, Vol 51, Issue 1, p181
- ISSN
0921-898X
- Publication type
Article
- DOI
10.1007/s11187-017-9927-x