Şeker, MuratYang, Judy S.2012-04-272012-04-272012-04https://hdl.handle.net/10986/6049How corruption affects economic performance has been studied for over a decade. Yet the lack of detailed firm-level data has limited research regarding who is carrying the real burden of corruption. This study shows that for firms in the Latin America and Caribbean region, bribery significantly distorts firm growth. Firms that pay bribes when conducting business transactions -- such as applying for permits, electricity, or water connections -- have 24 percent lower annual sales growth than firms that do not face such solicitations. Moreover, these distortions are more severe for low-revenue-generating and young firms. Using the instrumental variables method, the authors show that these results are robust to different specifications and the use of different sub-samples.CC BY 3.0 IGOABUSEACCESS TO EXTERNAL FINANCEACCESS TO FINANCEBACKBONEBRANCHBRIBEBRIBERYBRIBESBUSINESS ACTIVITIESBUSINESS CLIMATEBUSINESS ENVIRONMENTBUSINESS ENVIRONMENTSBUSINESS OPERATIONSBUSINESS TRANSACTIONBUSINESS TRANSACTIONSCAPITAL FLOWSCOMMODITYCORRUPTCORRUPT OFFICIALCORRUPT OFFICIALSCORRUPTIONCORRUPTION PERCEPTIONCORRUPTION PERCEPTION INDEXCPICPI SCORESCRIMEECONOMIC ACTIVITIESECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHELECTRICITYEMPLOYMENTEMPLOYMENT GROWTHENTERPRISE SURVEYENTERPRISE SURVEYSENTREPRENEURIAL ABILITIESENTREPRENEURIAL ABILITYENTREPRENEURSHIPEXCHANGE RATESEXCLUSIONEXTERNAL FINANCINGFINANCIAL BURDENFINANCIAL CONSTRAINTSFIRM SIZEFIRM SIZESFIRMSFOREIGN DIRECT INVESTMENTFOREIGN OWNERSHIPGOVERNMENT OWNERSHIPGOVERNMENT SERVICESGROUP OF FIRMSGROWTH POTENTIALINNOVATIONINSPECTIONSINTERNATIONAL BANKINTERNATIONAL STANDARDINTERNATIONAL TRADEJOB CREATIONKNOWLEDGE BASELEADERSHIPLEGAL CONSTRAINTSLICENSELICENSESMANUFACTURINGOPEN ACCESSPERFORMANCE MEASURESPETTY CORRUPTIONPRIVATE SECTORPRIVATE SECTOR DEVELOPMENTPRODUCT INNOVATIONPRODUCTIVITYPROPRIETORSHIPPROPRIETORSHIPSPUBLIC OFFICIALSR&DREAL ESTATERESULTRESULTSRETAIL TRADESALES GROWTHSENSITIVITY ANALYSESSIZE OF FIRMSSMALL BUSINESSSMALL BUSINESS GROWTHSMALL FIRMSSMESOLICITATIONSOLICITATIONSTARGETSTAXATIONTECHNOLOGICAL INNOVATIONTRANSPARENCYWEBWorld Bank10.1596/1813-9450-6046