The Effect of Combining Economic Activities on Corruption; A Case Study of Developing Countries

Esfahani, Pourya

Document Type : ORIGINAL ARTICLE

Author

Pourya Esfahani

M.A. in Economics, Tehran University, Tehran, Iran

Abstract

Corruption is defined as the manipulation of power by private and public authorities to achieve personal and individual goals. Many articles have been written about the factors formed corruption that a wide range of variables to be included. In this article we will examine the role of a factor in the corruption forming that had not been studied yet. This factor is combining economic activities. The combining economic activities is defined by using of the ratio of the industrial value added in GDP and the ratio of the services sector value added in GDP. Also, the main purpose of this paper is to study the effect of combining economic activities on corruption, using the data for 60 developing countries from 1995 to 2014. In this regard, we use six variables including corruption, government size, democracy, GDP per capita, the ratio of the value added in the industrial sector to the GDP and the ratio of the value added in the service sector to the GDP. Our hypothesis is that combining economic activities is effective on corruption. In this paper, 2 GMM models are estimated. The results indicate that variables of democracy, GDP per capita and the ratio of the industrial sector to GDP has a positive relationship with corruption index. That is, an increase in these variables reduces the level of corruption. Also, the variables of government size and the ratio of service sector to GDP have a negative relationship with corruption index which means an increase in these two variables raises the level of corruption.

Keywords

20.1001.1.22285954.1396.7.27.10.2

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Economic Growth and Development Research

The Effect of Combining Economic Activities on Corruption; A Case Study of Developing Countries

References

References

Volume 7, Issue 27 - Serial Number 27
July 2017
Pages 157-170

The Effect of Combining Economic Activities on Corruption; A Case Study of Developing Countries

References

References

Volume 7, Issue 27 - Serial Number 27July 2017Pages 157-170

Volume 7, Issue 27 - Serial Number 27
July 2017
Pages 157-170