TY - JOUR
T1 - Corruption and Firms
AU - Colonnelli, Emanuele
AU - Prem, Mounu
N1 - Funding Information:
We thank Shai Bernstein, Nick Bloom, Pascaline Dupas, Joshua Rauh, and Amit Seru for their invaluable advice. We also thank Eliot Abrams, Diogo Britto, Arun Chandrasekhar, Francesco Decarolis, Marcel Fafchamps, Claudio Ferraz, Frederico Finan, Spyros Lagaras, Borja Larrain, Stephan Litschig, Elisa Maffioli, Davide Malacrino, Sauro Mocetti, Marcus Opp, Rohini Pande, Nicola Pierri, Paolo Pinotti, Luigi Pistaferri, Paolo Pinotti, Jacopo Ponticelli, Tom s Rau, Cian Ruane, Andrei Shleifer,Michelle Skinner, Isaac Sorkin, Amir Sufi, Edoardo Teso, Margarita Tsoutsoura, RobVishny, Austin Wright, and seminar participants at Harvard Business School, Columbia Business School, MIT Sloan, Northwestern Kellogg, Yale SOM, Chicago Booth, UPenn Wharton, Princeton, Berkeley Haas, LSE, Indiana Kelley, Dartmouth Tuck, U of Michigan Ross, U Pompeu Fabra, U Kentucky Gatton, U Maryland Smith, UT Austin McCombs, ESMT Berlin, Tsinghua U PBC, Peking U Guanghua, Osaka U, Hitotsubashi, GRIPS, U Warwick, U del Rosario, CEIBS, Insper, FGV-EAESP, PUC-Rio, PUC-Chile, U de Chile, U de Talca, UWashington Foster, Bank of Italy, Stanford, SFSU, USF, and conference participants at Northwestern Development Rookiefest, LACEA-PEG Montevideo, Copenaghen Business School, NEUDC-MIT, DEVPEC, TADC-LBS, USC Marshall, EEA-ESEM, EMCON, ESSFM Gerzensee, FinanceUC, and the AEA for helpful comments and suggestions. Naoko Yatabe and Valdemar Pinho Neto provided superb research assistance.We are grateful to the CGU director Gustavo de Queiroz Chaves and CGU officials, and to the Stanford SEED, SCID, and IRiSS centres, the CEPR-PEDL Initiative, the J-PAL Governance Initiative, The University of Chicago Booth School of Business, and Universidad del Rosario for financial support.
Publisher Copyright:
© 2021 The Author(s) 2021. Published by Oxford University Press on behalf of The Review of Economic Studies Limited.
PY - 2022/3/1
Y1 - 2022/3/1
N2 - We estimate the causal real economic effects of a randomized anti-corruption crackdown on local governments in Brazil using rich micro-data on corruption and firms. After anti-corruption audits, municipalities experience an increase in the number of firms concentrated in sectors most dependent on government relationships and public procurement. Through the estimation of geographic spillovers and additional tests, we show that audits operate via both a direct detection effect as well as through indirect deterrence channels. Politically connected firms suffer after the audits. Our estimates indicate the anti-corruption program generates significant local multipliers which are consistent with the presence of a large corruption tax on government-dependent firms.
AB - We estimate the causal real economic effects of a randomized anti-corruption crackdown on local governments in Brazil using rich micro-data on corruption and firms. After anti-corruption audits, municipalities experience an increase in the number of firms concentrated in sectors most dependent on government relationships and public procurement. Through the estimation of geographic spillovers and additional tests, we show that audits operate via both a direct detection effect as well as through indirect deterrence channels. Politically connected firms suffer after the audits. Our estimates indicate the anti-corruption program generates significant local multipliers which are consistent with the presence of a large corruption tax on government-dependent firms.
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U2 - 10.1093/restud/rdab040
DO - 10.1093/restud/rdab040
M3 - Research Article
AN - SCOPUS:85126780628
SN - 0034-6527
VL - 89
SP - 695
EP - 732
JO - Review of Economic Studies
JF - Review of Economic Studies
IS - 2
ER -
