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Having in mind the main debate “grease the wheels” vs. “sand the wheels”, the main objective of this study is to find the way in which corruption and shadow economy influence economic and sustainable development. A large cross-country database of 185 countries is used for the 2005–2015 time period. We find that corruption and shadow economy are poverty-driven diseases and they highly characterize low-income countries. Thus, the higher levels of corruption and shadow economy are correlated with low levels of economic and sustainable development. Then, the main contribution of this work consists of finding general and empirical evidence for the destructive role held by the corruption and shadow economy phenomena upon the economic and sustainable development of states. However, we also find some evidence that corruption can be also seen as a way to circumvent the law in order to achieve higher economic benefits and thereby to increase economic development. In addition, we find that economic and sustainable development in high-income countries is more strongly and negatively affected by the phenomena of corruption and shadow economy than in the case of low-income countries. Our research may have political implications for the government institutions that need to adopt the best-required policies, in order to boost economic and sustainable development. For low-income countries, we find some evidence for positive effects of corruption and shadow economy upon economic and sustainable development and the immediate practical implications are not to encourage but to effectively and strongly fight against these destructive phenomena and to find the proper channels to increase the institutional quality and to adopt the appropriate regulatory policies.

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The COVID-19 pandemic has disrupted every facet of life globally. Business and commerce are key areas where the monetary crunch has been acutely felt. This study aims to analyze the various key changes in entities' activities to evaluate the level of business performance in response to the COVID-19 pandemic. For this purpose, we use panel data analysis on 218 Romanian listed companies of different sizes (big and small) and belonging to different business sectors for the period June 30, 2019-June 30, 2020. We find that the net profits of the overall market decreased by 37.43% over the analyzed period. However, small companies engaged in agriculture, commerce, construction, IT R&D, and transport and storage witnessed better financial performance. In addition, our results show that equity financing, proper liquidity management, and an increased company size consolidate the economic performance of entities regarding return on equity and return on assets. Our findings are useful for policymakers such as managers and investors and can help them make the best decision for their managing or investing activities. Moreover, governments need to know how companies respond to the pandemic to identify the sectors of activity that are more vulnerable to the crisis' effects and the main financial management decisions that must be adopted by companies during times of crises.

This paper investigates the influence of culture on the level of entrepreneurship and the possible moderating role of the level of economic development upon this relationship. For our purpose, an initial sample of 125 countries (43 high-income and 82 low-income countries) is used, over the 2006–2016 time period. At first, we use a panel analysis of the reduced sample which is furthermore completed by a hierarchical regression analysis. Our main results provide clear evidence that culture represents an important predictor of the level of entrepreneurship. Among the dimensions of culture, uncertainty avoidance and indulgence versus restraint are found to have the highest influence upon the level of entrepreneurship. Moreover, our empirical findings reveal that the relationship between culture and entrepreneurship is moderated differently by economic development. Thus, high-income countries face a three times higher rate of entrepreneurship than low-income countries. Our findings suggest that culture is more valued in high-income countries offering a higher social support in entrepreneurial activities than in low-income countries. We also find that some cultural patterns such as individualism, femininity, low uncertainly avoidance, short-term orientation or restrain may stimulate entrepreneurship in high-income countries but may be very dysfunctional in low-income countries. Our findings are also useful for policy makers to acknowledge the relationship between the cultural values of a country and its entrepreneurial activities, in order to adjust their policy measures for a better stimulation of the business environment.