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How does Corruption Affect Innovation? - New Evidence from Macro-level Data

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Abstract

This article explores the connection between a country’s corruption-related risk exposures and innovations. For this purpose, I performed two fixed-effects panel-data regression models by utilizing Research and Development (R&D) expenditure as a dependent variable and absolute corruption scores & degree of corruption-related risks exposures as independent variables in the presence of five control variables for 2019–2021. The corruption scores & degree of corruption-related risk exposures were collected from the Risk Indexes database. Data related to other variables, such as R&D expenditure, Industry structure, Energy Prices, and Urbanization levels, were fetched from the website of World Bank indicators. Further, the Population data were obtained from the worldmeters database. Consistent with the Sand-the-wheels theory, this research found that the country’s high corruption-related risk exposures negatively influence innovations. On the other hand, the lower degree of corruption-related risks boosts innovations in an economy. This study provides policymakers with significant implications of the country’s corruption-related risk exposures in the best interests of the world’s stakeholders.

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This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

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Authors and Affiliations

  1. Finance and Accounting Area, Indian Institute of Management Jammu, Jammu, Jammu and Kashmir, India

    Praveen Kumar

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  1. Praveen Kumar
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Correspondence to Praveen Kumar.

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Appendix I

Appendix I

List of countries under study

Country

Country

Country

Country

Afghanistan

Dominican Republic

Lithuania

Samoa

Albania

Ecuador

Luxembourg

Sao Tome and Principe

Algeria

Egypt

Macao

Saudi Arabia

Andorra

El Salvador

Madagascar

Senegal

Angola

Equatorial Guinea

Malawi

Serbia

Anguilla

Eritrea

Malaysia

Seychelles

Antigua & Barbuda

Estonia

Maldives

Sierra Leone

Argentina

Eswatini

Mali

Singapore

Armenia

Ethiopia

Malta

Slovakia

Aruba

Fiji

Marshall Islands

Slovenia

Australia

Finland

Mauritania

Solomon Islands

Austria

France

Mauritius

Somalia

Azerbaijan

French Polynesia

Mexico

South Africa

Bahamas

Gabon

Micronesia

South Korea

Bahrain

Gambia

Moldova

South Sudan

Bangladesh

Georgia

Mongolia

Spain

Barbados

Germany

Montenegro

Sri Lanka

Belarus

Ghana

Montserrat

Sudan

Belgium

Greece

Morocco

Suriname

Belize

Greenland

Mozambique

Sweden

Benin

Grenada

Myanmar

Switzerland

Bermuda

Guatemala

Namibia

Syria

Bhutan

Guinea

Nauru

Taiwan

Bolivia

Guyana

Nepal

Tajikistan

Bonaire Sint Eustat.

Haiti

Netherlands

Tanzania

Bosnia & Herzego.

Honduras

New Caledonia

Thailand

Botswana

Hong Kong

New Zealand

Timor

Brazil

Hungary

Nicaragua

Togo

Brunei

Iceland

Niger

Tonga

Bulgaria

India

Nigeria

Trinidad and Tobago

Burkina Faso

Indonesia

Niue

Tunisia

Burundi

Iran

North Korea

Turkey

Cambodia

Iraq

North Macedonia

Turkmenistan

Cameroon

Ireland

Norway

Turks & Caicos Islands

Canada

Israel

Oceania

Tuvalu

Cape Verde

Italy

Oman

Uganda

Chad

Jamaica

Pakistan

Ukraine

Chile

Japan

Palestine

United Arab Emirates

China

Jordan

Panama

United Kingdom

Colombia

Kazakhstan

Papua New Guinea

United States

Comoros

Kenya

Paraguay

Uruguay

Congo

Kiribati

Peru

Uzbekistan

Cook Islands

Kosovo

Philippines

Vanuatu

Costa Rica

Kuwait

Poland

Venezuela

Croatia

Kyrgyzstan

Portugal

Vietnam

Cuba

Laos

Qatar

Wallis &Futuna Islands

Cyprus

Latvia

Romania

Yemen

Czechia

Lebanon

Russia

Zambia

Republic of Congo

Lesotho

Rwanda

Zimbabwe

Denmark

Liberia

Saint Kitts and Nevis

Djibouti

Libya

Saint Lucia

 

Dominica

Liechtenstein

Saint Vincent &Grenadines

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Kumar, P. How does Corruption Affect Innovation? - New Evidence from Macro-level Data. J. Quant. Econ. 21, 925–941 (2023). https://doi.org/10.1007/s40953-023-00362-x

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