Publications
Publications
- Review of Economic Studies
Corruption and Firms
By: Emanuele Colonnelli and Mounu Prem
Abstract
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. 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.
Keywords
Citation
Colonnelli, Emanuele, and Mounu Prem. "Corruption and Firms." Review of Economic Studies 89, no. 2 (March 2022): 695–732.