The Impact of Corruption on Firm Performance: Evidence from Pakistan

Abstract

The purpose of this study is to investigate the impact of bribery on firm performance and provides quantitative estimates of the impact of corruption on the performance of the firm. Impact of bribery is checked through the questionnaire which is distributed among 100 respondents. In theoretical framework, firm performance is dependent variable and bribery is independent variable. The correlation between firm performance and bribery which is measure in obtaining more government contracts in questioner and bribery which is measure as cost of obtaining the contracts is (r = -0.8012) having negative association between them. The size value of correlation is (r = -0.0074 & -0.0056) showing that the size is not important in bribery and have subsequently have no affect on firm performance. The value of R-Square in table 2 is close to 0.649 which indicate very well fit to data. It means that almost 65 % change is due to the response variable (bribery). F-test value is very significant in both table showing that the model is best fitted with the data. Sample size is one of the study limitation which could be removed in future research by enlarging sample size.

Keywords: Corruption. Bribery.  Firm performance. Economic growth. Government contracts