Does corruption impact firm innovation? Evidence from Portugal

• Type: Article in International Scientific Journal
• Date: 2022

Authors

Cerdeira, Jorge (Author) FLUP; Lourenco, Diogo (Author) FEP

Journal

Title: Economies

Vol. 10 No. 7

ISSN: 2227-7099

Publisher: MDPI

Indexing

ISI Web of Knowledge - 4 Citations

ISI Web of Science

Scopus - 4 Citations

ProQuest

SHERPA/RoMEO

Worldcat OCLC

Econlit

EBSCO

DOAJ

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Other information

Authenticus ID: P-00X-0GH

DOI: 10.3390/economies10070173

Abstract (EN): This paper aims to analyze the impact of corruption on firm innovation in Portugal, using data from the World Bank Enterprise Surveys on 1062 firms for 2019. We employ regression analysis and instrumental variables techniques to account for endogeneity in the corruption variable. Our results show that corruption fosters innovation in Portugal, regardless of the dependent variable we use to measure innovation. We have also analyzed the effect of corruption on innovation in foreign and domestic firms. While corruption boosts innovation for domestic firms, we found that the effect is not statistically significant for foreign firms. Our conclusions are of interest to policymakers, as any measure intended to fight corruption should consider its impact on firm performance. As this article shows, such an impact need not be negative. Nevertheless, if mitigating the impact of corruption is still intended, our results indicate that measures promoting foreign direct investment could help achieve this.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 10