1. The Impact of Corruption on Nigerian Enterprises' Performance: An Empirical Study
- Author:
- Mohamed Zakaria Fodol
- Publication Date:
- 11-2021
- Content Type:
- Journal Article
- Journal:
- Bilgi
- Institution:
- Sakarya University (SAU)
- Abstract:
- This study aims to assess the effects of corruption on Nigerian enterprises performance using data from the World Bank's Enterprises Survey, (Panel Data) for the years 2007, 2009, 2014. The Pooled Regression Model was applied. The corruption measured by six indicators divided into two groups, graft incidence and perceived need to make bribe payments. Graft incidence measures enterprises experienced request for a bribe payment across five types of applications, namely (1) an electrical connection, (2) water connection, (3) phone connection, (4) construction-related permit, and (5) total annual informal payment to public officials. While the perceived need to make bribe payments based on the answer to the question: (6) It is said that establishments are sometimes required to give gifts to public officials to ‘get things done’. The study found that the enterprises experienced a statistically insignificant bribe payment for the water connection and construction-related permit are statistically insignificant. Meanwhile, the level of firms expected to give gifts to public officers "to get things done", especially related to the sale and purchase of fixed assets significant and positively affect the enterprises' performance. As for the total payments to the public officers is significant and has negative effects, which indicates the medium or long terms impacts. This may be explained by the fact that developing economies are characterized by formal institutional flaws such as ineffective public administration and weak rule of law. It can also be explained by the theory of transaction cost, which states that the high transaction cost leads to a decrease in profits and thus poor performance. Unlike other studies, this study indicates that corruption represents an obstacle to Nigerian enterprises’ performance. The argument is that public authorities should move away from increasing the costs of corruption by improving the performance of public officials and implementing standards of transparency. Entrepreneurs also must search for alternatives to avoid paying bribes, such as leasing financing and so on.
- Topic:
- Corruption, Economy, Business, and Performance Evaluation
- Political Geography:
- Africa and Nigeria