The effect of corruption on the manufacturing sector in India

Atsushi Kato; Takahiro Sato

doi:10.1007/s10101-014-0140-y

The effect of corruption on the manufacturing sector in India

Atsushi Kato, Takahiro Sato

Graduate School of Asia-Pacific Studies

Research output: Contribution to journal › Article

4 Citations (Scopus)

Abstract

This article investigates the effects of corruption on the performance of the manufacturing sector at the state level in India. We employ conviction rates of corruption-related cases as an instrument for the extent of corruption, address the underreporting problem, and examine the impact of corruption on the gross value added per worker, total factor productivity, and capital-labor ratio of three-digit manufacturing industries in each state. Our estimation results show that corruption reduces gross value added per worker and total factor productivity. Furthermore, we show that the adverse effects of corruption are more salient in industries with smaller average firm size.

Original language	English
Pages (from-to)	155-178
Number of pages	24
Journal	Economics of Governance
Volume	15
Issue number	2
DOIs	https://doi.org/10.1007/s10101-014-0140-y
Publication status	Published - 2014 Jan 1

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Keywords

Corruption
Gross value added
Scale economies
Total factor productivity

ASJC Scopus subject areas

Business and International Management
Economics, Econometrics and Finance(all)

Cite this

Kato, A., & Sato, T. (2014). The effect of corruption on the manufacturing sector in India. Economics of Governance, 15(2), 155-178. https://doi.org/10.1007/s10101-014-0140-y

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Access to Document

10.1007/s10101-014-0140-y