Corruption and corporate investment efficiency around the world

Abstract

PurposeThe paper investigates the effect of corruption on corporate investment efficiency around the world.Design/methodology/approachThe sample includes 218,350 observations from 30,074 firms across 42 countries. The authors measure corruption based on the Corruption Perception Index (CPI) from Transparency International, Corruption Control Index (CCI) from the World Bank and Corruption Index from the International Country Risk Guide.FindingsThe authors find that corruption is negatively related to investment efficiency. The robustness checks with different measures of corporate investment and alternative regression approaches show consistent findings. Moreover, the authors also find that the effect of corruption is stronger (weaker) in strong (weak) shareholder protection countries.Originality/valueThe paper has two important contributions to the literature. First, it shows that corruption environment is also a determinant of corporate investment efficiency. Second, legal protection of shareholders can mitigate the negative effect of corruption on corporate investment efficiency.

Prototype to Identify the Capacity in Cybersecurity Management for a Public Organization

“…The levels of corruption in the local, national and international context are negatively related to the efficiency of investments in organizations. Some indicators that make it possible to measure corruption at the country level are the Corruption Perception Index (CPI) of Transparency International, the Corruption Control Index (CCI) of the World Bank and the Corruption Index of the International Country Risk Guide [25].…”

“…In order to apply the CMC conceptual model and quantify the measurement, for each factor we established criteria to be evaluated for a public organization. Table 2 shows these factors with their respective criteria, which have been improved accordingly [1], For the internal factors, practical criteria used in public organizations were considered, for the external factor we considered the 5 dimensions of the CMM model and a criterion of corruption levels was added [25]. We also defined the assessment scale for each factor criterion, which can be seen in Table 3; This scale starts from 0 to 3, which meets little or nothing, until reaching 9 to 10, where it meets all of that criterion, which is the maximum score that a one-factor criterion can have.…”