Corruption, crime and investments by firms in emerging economies

Abstract

PurposeThe study aims to investigate the effect of corruption and crime on the investments by firms in emerging economies (EEs).Design/methodology/approachThe study adopts the generalised methods of moments (GMM) estimator and data across 57 EEs.FindingsThe study shows that crime management, corruption and external quality assurance drive-up investments. Additionally, investments decline with firm age and crime incidence. Corruption and crime managements increase investments by exporting firms more than non-exporting firms investments. Also, external auditor services benefit investments by large firms more than small-medium firms.Originality/valueThere is a need for EEs to implement policies that will curtail corruption and create a level playing field and sustainable firm growth. EEs firms must be innovative to expand their productive investments and grow over time. Also, EEs firms should seek external quality certification, invest in internal security and monitor goods in transit.

The Impact of Crime against a Person on Domestic Investment in Dubai

“…These values indicate an inverse proximity effect regarding the impact on domestic investment. The results are consistent with many recent studies concerning the relationship between crime and economic variables (Garriga and Phillips 2022;Sugiharti et al 2022;Simo-Kengne and Bitterhout 2023;Raj and Kalluru 2023;Boamah et al 2023;Yu et al 2023;Magableh et al 2023;Forgione and Migliardo 2023), suggesting that the Dubai Police needs to continue conducing activities in order to minimize the impact of crime against a person on domestic investment and economic activity. This management involves the utilization of advanced technology and artificial intelligence.…”