Sohrab Delangizan; Mohammad Sharif Karimi; Zeinab Khalvandi
Volume 4, Issue 15 , August 2014, , Pages 104-87
Abstract
Financial corruption affects on economy’s health via different channels which the most important channel is distortions in the allocation of resources. On the other hand, the level of knowledge-based economy also can affect on behaviour of factors of production. An important question is whether ...
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Financial corruption affects on economy’s health via different channels which the most important channel is distortions in the allocation of resources. On the other hand, the level of knowledge-based economy also can affect on behaviour of factors of production. An important question is whether the level of knowledge-based economy can affect the relationship between corruption and economic growth? This study investigates the effect of financial corruption on economic growth for 138 countries over the period 2000 - 2011 by using the consolidated corruption perception indicator, the level of knowledge based economy indicator and economic growth and a dynamic panel model which called Generalized method of moments (GMM). The results of classification of countries show that, in the groups with high knowledge-based economy indicator, control of financial corruption has positive impact on economic growth but in the groups with moderate knowledge-based economy indicator, control of corruption, has negative impact on economic growth. Also, the results show that in the first group of countries, stability of corruption control policies has a positive impact on economic growth but in the second group of countries, it has a negative effect.
