Business corruption, public sector corruption, and growth rate: time series analysis using Korean data

Abstract

With annual data for 1986 to 2001 from South Korea (hereafter Korea), the regression results are consistent with the hypothesis that business corruption and public sector corruption have detrimental effects on real per capita growth rate. It is also evident that two causal relationships between each pair of corruptions exist; reducing one is likely to result in reductions in the other, implying that business and public sector corruptions may be one package in policy formulation. The elasticity of real per capita growth rate with respect to two indicators of public sector corruptions indicate that corruption in terms of number is more sensitive to real per capita growth rate than corruption in the amount of money.

Acknowledgements

This work was supported by Korea Research Foundation Grant (KRF-2003-005- B00005).