Heterogeneous Links Between Corruption and Innovation in a Global Economy

This study examines the impact of corruption on business innovation from a comparative perspective and shows that this relationship is inherently heterogeneous across firms and countries. It addresses two main research questions: (i) Does corruption facilitate or hinder innovation in the countries studied? (ii) To what extent is the relationship between corruption and innovation mediated/shaped by countries’ institutional configurations and firm characteristics (foreign and domestic ownership)? We analyze data from the fifth and sixth waves (2012–2016 and 2018–2019) of the EBRD’s World Bank Business Environment and Enterprise Performance Survey (BEEPS), using a balanced panel of 3584 establishments in 22 Eastern European and Central Asian economies. The results provide two key insights into the relationship between corruption and innovation. First, the institutional setting plays a crucial role in shaping both the strength and the direction of this relationship, for example, when comparing EU and non-EU countries. Second, the impact of corruption at the firm level varies depending on the ownership structure: the ‘greasing’ effect is particularly relevant for foreign firms operating in weak institutional environments, but appears to be ineffective—if not ‘sanding’—for foreign firms in contexts with stronger anti-corruption controls.

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Publication Details

Journal
Journal of risk and financial management
Published
2025-03-19
DOI
https://doi.org/10.3390/jrfm18030164
Citations
2
Primary Topic
Corruption and Economic Development
Type
article
Field-Weighted Citation Impact
8.40
Controls
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article

Heterogeneous Links Between Corruption and Innovation in a Global Economy

Maria Luigia Segnana, Roberto Iorio
2 citations
Journal of risk and financial management
Corruption and Economic Development
8.40
article

Heterogeneous Links Between Corruption and Innovation in a Global Economy

Maria Luigia Segnana, Roberto Iorio
article en
2 citations

Abstract

This study examines the impact of corruption on business innovation from a comparative perspective and shows that this relationship is inherently heterogeneous across firms and countries. It addresses two main research questions: (i) Does corruption facilitate or hinder innovation in the countries studied? (ii) To what extent is the relationship between corruption and innovation mediated/shaped by countries’ institutional configurations and firm characteristics (foreign and domestic ownership)? We analyze data from the fifth and sixth waves (2012–2016 and 2018–2019) of the EBRD’s World Bank Business Environment and Enterprise Performance Survey (BEEPS), using a balanced panel of 3584 establishments in 22 Eastern European and Central Asian economies. The results provide two key insights into the relationship between corruption and innovation. First, the institutional setting plays a crucial role in shaping both the strength and the direction of this relationship, for example, when comparing EU and non-EU countries. Second, the impact of corruption at the firm level varies depending on the ownership structure: the ‘greasing’ effect is particularly relevant for foreign firms operating in weak institutional environments, but appears to be ineffective—if not ‘sanding’—for foreign firms in contexts with stronger anti-corruption controls.

Journal of risk and financial managementVol. 18(3)
University of Salerno (IT), University of Trento (IT)
Openalex Percentile: Top 4%
Corruption and Economic Development
8.40
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Heterogeneous Links Between Corruption and Innovation in a Global Economy — Maria Luigia Segnana, Roberto Iorio · Journal of risk and financial management (2025) | TGRS Research Map | TGRS