Description
Title: Does Corporate Corruption Affect Innovation? Proof from Portugal
Abstract: This study examines how corruption affects firm innovation in Portugal using information from 1062 firms in the World Bank Enterprise Surveys for 2019. To take endogeneity in the corruption variable into account, we use regression analysis and instrumental variables techniques. No matter what dependent variable we choose to measure innovation with, our findings demonstrate that corruption encourages innovation in Portugal. The impact of corruption on innovation in both domestic and international firms has also been studied. For domestic firms, corruption increases innovation, but for foreign firms, the effect is not statistically significant, according to our research. Policymakers should take note of our findings because any action taken to combat corruption should take into account how it will affect business performance. This article demonstrates that such an impact need not be detrimental. However, if reducing the effects of corruption is still a goal, our findings suggest that policies encouraging foreign direct investment could contribute to this.
Keywords: corruption; innovation; firm performance; IV estimation; foreign firms
Paper Quality: SCOPUS / Web of Science Level Research Paper
Subject: Economics
Writer Experience: 20+ Years
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