Abstract
The current evidence-base regarding the impacts of corruption on firm performance is based largely on
studies of individual countries and contains mixed results. Therefore, the aim of this paper is to
achieve a better insight into this relationship by reporting the results of a firm-level analysis of the
impacts of corruption on firm performance using World Bank Enterprise Survey (WBES) data across
40 African countries. The clear result is that corruption significantly enhances rather than harms annual
sales, employment and productivity growth rates. The outcome is to re-theorize participation in acts of
corruption as beneficial for the individual firms engaged in such activity, while recognizing the wider
evidence that this is not an optimal strategy at the aggregate country level. The outcome will be to
advance knowledge about how corruption needs to be tackled. To eliminate corruption, it is shown
here to be necessary for public authorities to recognize that corruption is an efficient strategy at the
firm level and to adopt measures to alter the cost/benefit ratio confronting individual enterprises, and at
the same time, to address the country-level formal institutional deficiencies that characterize many
developing countries and result in the prevalence of corruption
studies of individual countries and contains mixed results. Therefore, the aim of this paper is to
achieve a better insight into this relationship by reporting the results of a firm-level analysis of the
impacts of corruption on firm performance using World Bank Enterprise Survey (WBES) data across
40 African countries. The clear result is that corruption significantly enhances rather than harms annual
sales, employment and productivity growth rates. The outcome is to re-theorize participation in acts of
corruption as beneficial for the individual firms engaged in such activity, while recognizing the wider
evidence that this is not an optimal strategy at the aggregate country level. The outcome will be to
advance knowledge about how corruption needs to be tackled. To eliminate corruption, it is shown
here to be necessary for public authorities to recognize that corruption is an efficient strategy at the
firm level and to adopt measures to alter the cost/benefit ratio confronting individual enterprises, and at
the same time, to address the country-level formal institutional deficiencies that characterize many
developing countries and result in the prevalence of corruption
