Corruption and System Change in the Czech Republic: Firm-Level Evidence

Abstract

Corruption is a widespread phenomenon in all countries undergoing market transition. However, the Czech Republic stands apart, with its incredible entanglement of corruption, politics and business. Although corruption on the firm level in the Czech Republic is heavily criticized, the results of our in-depth interviews conducted with Czech SMEs showed that almost every firm has encountered some form of corruption and even used corruption to either increase sales, help negotiations, or increase production. Most of our respondents admitted that corruption was useful for day-to-day business. This article aims to obtain information about the state of corruption in enterprises in the Czech Republic and map the behaviour of entrepreneurs in companies. Our results offer ways to fight corruption: apart from highlighting the negative traits of corruption, emphasis should be made on determining to what extent corruption would be acceptable for firms and their clients. This could be useful for designing various state policies that might influence system change and market development in CEECs and both directly and indirectly influence the volume of corruption.

Leading factors in the formation of innovative education environment

“…Innovative development of universities helps to increase their level of competitiveness on the market of educational services, as well as to ensure financial stability both through the work volume and the transition to new standards of quality of the process of obtaining knowledge and the quality of knowledge itself (Pukhova et al, 2016). It also helps to create and foster innovativeness in further applications (Ehrenberger et al, 2015;Koudelková et al, 2015). Figure 1 shows the innovative educational environment of the Russian university, describing the conditions for its functioning and development.…”

Management and promotion of economic innovation potential

“…leading to radical changes of all productive and economic system, and improving, directed to change of this or that subsystem of productive and economic system (Koudelková et al, 2015;Strielkowski et al, 2016;Mishchuk et al, 2016). Furthermore, the basic and improving innovations can be technological, organizational and managerial or marketing.…”

Preference of institutional changes in social and economic development

“…This social consensus guarantees there exists a certain level of social welfare which further promotes investments' growth, better investment climate, high rate of economic growth, etc. (Koudelková et al, 2015;Nawrot, 2015) And again, S. Kuznetz (1995) studied the relation between economic growth and social inequality. While studying this relation it is important to pose the following questions: what is the role of the state (represented by political and tax authorities) in wealth distribution?…”