DOES CORRUPTION AFFECT THE IMPACT OF FINANCIAL DEVELOPMENT ON ENTREPRENEURSHIP? EVIDENCE FROM EMERGING ECONOMIES

Authors

  • Malihe Rabiei Fradanbeh Gonbad Kavous University, Department of Humanities & Physical Education
  • Mohsen Mohammadi Khyareh Gonbad Kavous University, Department of Humanities & Physical Education
  • Hadi Amini Gonbad Kavous, University Department of Humanities & Physical Education

DOI:

https://doi.org/10.51680/ev.37.1.8

Keywords:

Financial development, corruption, entrepreneurship, emerging countries, generalized method of moments

Abstract

Purpose: This study examines the relationship between financial development, corruption, and entrepreneurship in a sample of 21 emerging economies from 2008 to 2020.
Methodology: Utilizing the Generalized Method of Moments (GMM) econometric approach, we explore the interactive dynamics between these variables.
Results: Our findings indicate that higher levels of corruption are associated with increased entrepreneurial activity in these economies. This can be attributed to the prevalence of corrupt practices, such as bribery, which serve as a means for entrepreneurs to overcome barriers and initiate businesses. Conversely, while financial development has a positive influence on entrepreneurship, its impact is not statistically significant. However, when considering a combined effect of financial development and corruption, a positive net impact is observed. This suggests that corruption can facilitate access to financial resources for entrepreneurs in these emerging economies. These findings support the notion of the “grease the wheels effect”.
Conclusion: This study provides valuable insights into the complex interplay between financial accessibility, corruption, and entrepreneurship in emerging economies, informing policymakers and stakeholders on strategies to foster entrepreneurship and drive sustainable economic growth.

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Published

2024-06-17

How to Cite

Rabiei Fradanbeh, M., Mohammadi Khyareh, M., & Amini, H. (2024). DOES CORRUPTION AFFECT THE IMPACT OF FINANCIAL DEVELOPMENT ON ENTREPRENEURSHIP? EVIDENCE FROM EMERGING ECONOMIES. Ekonomski vjesnik/Econviews - Review of Contemporary Business, Entrepreneurship and Economic Issues, 37(1), 109–126. https://doi.org/10.51680/ev.37.1.8

Issue

Vol. 37 No. 1 (2024)

Section

PRELIMINARY COMMUNICATION

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