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ABSTRACT We assess different effects of corruption on corporate activities depending on whether a firm operates in an advanced or emerging economy. In emerging economies, greater corruption is related to… Click to show full abstract
ABSTRACT We assess different effects of corruption on corporate activities depending on whether a firm operates in an advanced or emerging economy. In emerging economies, greater corruption is related to greater capital expenditures. In advanced economies, greater corruption is positively related to innovation. Further, we find the relationship between corruption and capital exp20enditure (innovation) is moderated by diversification. Our findings suggest that corruption leads firms to take more action in the areas that the economy has a competitive edge in.
Journal Title: Applied Economics
Year Published: 2020
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