Essays on innovation and corruption : a cross-country analysis

Student thesis: Doctoral ThesisPhD

Abstract

Although the connection between innovation and corruption has been ubiquitous since the middle of the twentieth century, scholars have yet to establish an exact nature of this relationship: some researchers have found that corruption can boost the innovation level via removing the rigid obstacles to investment and foster innovation which eventually greases economic growth. Conversely, others demonstrated that corruption could deter innovation levels and the adverse relationship between corruption and innovation can slow down economic growth. This complex and controversial relationship encouraged us to further investigate the interaction between the two across many countries and over several years. To this aim, our first empirical chapter addresses the relationship between corruption and innovation. Unlike usual approaches, we apply two proxies to represent innovation and they are divided into: 1) innovation inputs, where a fixed effects method has been used, and 2) innovation outputs, where a random effects method has been used. The results show that corruption could sand the wheel of innovation inputs, yet, it shows no impact on innovation outputs. In conclusion, innovation inputs are adversely affected by corruption. Therefore, governments should establish anti-corruption campaigns as well as focus on minimizing corruption by implementing laws and regulations that discourage any attempts to corruption.The second empirical paper studies the effect of neighbouring corruption on home country innovation and, furthermore, examines neighbouring innovation impact on the home country corruption. Two Stages Least Squares method and random effects method have been used respectively to address these issues. The empirical evidence demonstrates that neighbouring corruption harms home innovation, as well as being adversely affected by neighbouring innovation. Additionally, geographical closeness between capital cities can increase corruption in both countries (neighbour and home country). Also, neighbouring openness acts as a hindrance to home country corruption, and it can help reduce corruption. Thus, we can conclude that countries can be affected by their neighbours’ levels of corruption, and that it is challenging to remain uncorrupted while surrounded by corrupted countries. To minimize the harmful effect of contagious corruption on home innovation therefore, governments should set strict laws and regulations at the borders.The third paper empirically investigates the influences of English Language, trade openness and corruption on innovation outputs, namely on research productivity, by using mixed models. Our empirical results show that both trade openness and corruption are adversely related to research productivity. However, the results also demonstrate that countries which have English as an official language are more active in the research field in terms of citations than those countries in which English is not an official language. On the other hand, in terms of publications the results showed that countries with English as an official language are not necessarily publishing more than those where English is not an official language. Therefore, governments should firstly support international and national grants by increasing the amount dedicated to the R&D sector, and secondly should also encourage international collaboration.
Date of Award15 Jan 2020
Original languageEnglish
Awarding Institution
  • University of Bath
SupervisorImran Shah (Supervisor), Ajit Mishra (Supervisor) & John Hudson (Supervisor)

Keywords

  • Innovation
  • corruption

Cite this

Essays on innovation and corruption : a cross-country analysis
Al Bulushi, M. (Author). 15 Jan 2020

Student thesis: Doctoral ThesisPhD