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- Title
The effect of corruption on the manufacturing sector in India.
- Authors
Kato, Atsushi; Sato, Takahiro
- Abstract
This article investigates the effects of corruption on the performance of the manufacturing sector at the state level in India. We employ conviction rates of corruption-related cases as an instrument for the extent of corruption, address the underreporting problem, and examine the impact of corruption on the gross value added per worker, total factor productivity, and capital-labor ratio of three-digit manufacturing industries in each state. Our estimation results show that corruption reduces gross value added per worker and total factor productivity. Furthermore, we show that the adverse effects of corruption are more salient in industries with smaller average firm size.
- Subjects
INDIA; MANUFACTURING industries; CORPORATE corruption; GROSS value added (Economics); INDUSTRIAL productivity; CRIMINAL convictions
- Publication
Economics of Governance, 2014, Vol 15, Issue 2, p155
- ISSN
1435-6104
- Publication type
Article
- DOI
10.1007/s10101-014-0140-y