The Obstacle Named 'Corruption':  An Empirical Analysis of Indian Firms

Abstract:

Using an individual level database of 9,000 plus Indian firms, we undertake a comprehensive empirical analysis examining factors that affect perception of corruption among firm owners.  Our results find that being located in the official capital city as well as being dependent on credit are associated with higher perceptions of corruption.  Interaction effect shows that being dependent on bank credit is especially harder for small and medium sized firms who then perceive greater corruption experiences.  We also find female owned firms perceive corruption to be of greater obstacle.  Finally, all types of firms – government owned, private owned or foreign owned – face higher perception of corruption.  Our study has important implications for policy makers in India who wish to encourage small and medium business scenario. 

Keywords: 

India; Firm level data; Corruption perception; Firm size; Bank credit 

JEL Classifications:

L26, L20, D73, O53   

Citation as:  

Dutta, N. (2019). "The Obstacle Named 'Corruption':  An Empirical Analysis of Indian Firms", Review of Economics & Finance, vol.17, no.3, pp. 51-64.