TY - JOUR
T1 - The effect of corruption on the manufacturing sector in India
AU - Kato, Atsushi
AU - Sato, Takahiro
PY - 2014/5
Y1 - 2014/5
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
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U2 - 10.1007/s10101-014-0140-y
DO - 10.1007/s10101-014-0140-y
M3 - Article
AN - SCOPUS:84899486103
SN - 1435-6104
VL - 15
SP - 155
EP - 178
JO - Economics of Governance
JF - Economics of Governance
IS - 2
ER -