Corruption, crime and investments by firms in emerging economies

Abstract

Purpose

The study aims to investigate the effect of corruption and crime on the investments by firms in emerging economies (EEs).

Design/methodology/approach

The study adopts the generalised methods of moments (GMM) estimator and data across 57 EEs.

Findings

The study shows that crime management, corruption and external quality assurance drive-up investments. Additionally, investments decline with firm age and crime incidence. Corruption and crime managements increase investments by exporting firms more than non-exporting firms investments. Also, external auditor services benefit investments by large firms more than small-medium firms.

Originality/value

There is a need for EEs to implement policies that will curtail corruption and create a level playing field and sustainable firm growth. EEs firms must be innovative to expand their productive investments and grow over time. Also, EEs firms should seek external quality certification, invest in internal security and monitor goods in transit.

Citation

Boamah, N.A., Ofori-Yeboah, F. and Owusu-Ansah, M. (2023), "Corruption, crime and investments by firms in emerging economies", Journal of Economic and Administrative Sciences, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JEAS-08-2022-0200