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 | |
| Publication status | Published - 2014 |
| Externally published | Yes |
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Keywords
- Corruption
- Gross value added
- Scale economies
- Total factor productivity
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Business and International Management
Cite this
The effect of corruption on the manufacturing sector in India. / Kato, Atsushi; Sato, Takahiro.
In: Economics of Governance, Vol. 15, No. 2, 2014, p. 155-178.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The effect of corruption on the manufacturing sector in India
AU - Kato, Atsushi
AU - Sato, Takahiro
PY - 2014
Y1 - 2014
N2 - 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.
AB - 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.
KW - Corruption
KW - Gross value added
KW - Scale economies
KW - Total factor productivity
UR - http://www.scopus.com/inward/record.url?scp=84899486103&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84899486103&partnerID=8YFLogxK
U2 - 10.1007/s10101-014-0140-y
DO - 10.1007/s10101-014-0140-y
M3 - Article
VL - 15
SP - 155
EP - 178
JO - Economics of Governance
JF - Economics of Governance
SN - 1435-6104
IS - 2
ER -