Are Innovating Firms Victims or Perpetrators? Tax Evasion, Bribe Payments, and the Role of External Finance in Developing Countries

Ayyagari, Meghana; Demirgüç-Kunt, Asli; Maksimovic, Vojislav

dc.creator	Ayyagari, Meghana
dc.creator	Demirgüç-Kunt, Asli
dc.creator	Maksimovic, Vojislav
dc.date	2012-03-19T18:41:20Z
dc.date	2012-03-19T18:41:20Z
dc.date	2010-07-01
dc.date.accessioned	2023-02-17T21:05:06Z
dc.date.available	2023-02-17T21:05:06Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100729092336
dc.identifier	http://hdl.handle.net/10986/3873
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244837
dc.description	This paper investigates corruption and tax evasion and their firm-level determinants across 25,000 firms in 57 countries, a large fraction of which are small and medium enterprises in developing countries. Firms that pay more bribes also evade more taxes. Corruption acts as a tax on innovation, particularly that of small and young firms. Innovating firms pay a larger percentage of their revenues in bribes to government officials than non-innovating firms. They do not, however, pay more protection money to private parties than other firms. Comparing the magnitudes of bribes and taxes evaded, innovating firms and firms that use formal finance are more likely to be net victims. The findings point to the challenges facing innovators in developing countries and the role of banks in curbing corruption and tax evasion.
dc.language	English
dc.relation	Policy Research Working Paper ; No. 5389
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCESS TO CREDIT
dc.subject	AGENCY PROBLEM
dc.subject	ANTI-CORRUPTION
dc.subject	ANTICORRUPTION
dc.subject	ASSETS
dc.subject	ASYMMETRIC INFORMATION
dc.subject	BANK ACCESS
dc.subject	BANK FINANCING
dc.subject	BANK LOAN
dc.subject	BANK POLICY
dc.subject	BANKING SECTOR
dc.subject	BANKS
dc.subject	BIASES
dc.subject	BORROWING
dc.subject	BRIBE
dc.subject	BRIBERY
dc.subject	BRIBES
dc.subject	BRIBING
dc.subject	BUSINESS ACTIVITIES
dc.subject	BUSINESS ASSOCIATIONS
dc.subject	BUSINESS PEOPLE
dc.subject	CHAMBERS OF COMMERCE
dc.subject	CHECKS
dc.subject	CONFIDENCE
dc.subject	COOPERATIVES
dc.subject	CORPORATE FINANCE
dc.subject	CORPORATE GOVERNANCE
dc.subject	CORPORATE TAX
dc.subject	CORPORATE TAX RATES
dc.subject	CORPORATE TAXES
dc.subject	CORRUPT
dc.subject	CORRUPT OFFICIAL
dc.subject	CORRUPT OFFICIALS
dc.subject	CORRUPTION
dc.subject	CORRUPTION ACTS
dc.subject	CORRUPTION PERCEPTION
dc.subject	CORRUPTION PERCEPTION INDEX
dc.subject	CREDIBILITY
dc.subject	CREDITORS
dc.subject	CRIME
dc.subject	CRIMINAL
dc.subject	CRIMINALS
dc.subject	DEBT
dc.subject	DEBT STRUCTURE
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPMENT FINANCE
dc.subject	DISPUTE RESOLUTION
dc.subject	DUMMY VARIABLE
dc.subject	DUMMY VARIABLES
dc.subject	EARNINGS
dc.subject	ECONOMIC ACTIVITY
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC GROWTH
dc.subject	EDUCATION LEVEL
dc.subject	ELECTRICITY
dc.subject	EMERGING MARKETS
dc.subject	ENTERPRISE PERFORMANCE
dc.subject	ENTREPRENEUR
dc.subject	ENTREPRENEURS
dc.subject	EQUIPMENT
dc.subject	EXCHANGE RATE
dc.subject	EXPENDITURES
dc.subject	EXPORTER
dc.subject	EXPORTERS
dc.subject	EXTERNAL FINANCE
dc.subject	EXTERNAL FINANCING
dc.subject	EXTORTION
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL INSTITUTIONS
dc.subject	FINANCIAL INTERMEDIARIES
dc.subject	FINANCIAL INTERMEDIATION
dc.subject	FINANCIAL SECTOR REFORM
dc.subject	FINANCIAL SYSTEM
dc.subject	FIRM PERFORMANCE
dc.subject	FOREIGN FIRMS
dc.subject	FORMAL BANK
dc.subject	FORMAL ECONOMY
dc.subject	FORMAL FINANCE
dc.subject	GIFTS
dc.subject	GOVERNANCE ISSUES
dc.subject	GOVERNMENT CORRUPTION
dc.subject	GOVERNMENT OFFICIALS
dc.subject	GOVERNMENT REGULATION
dc.subject	GOVERNMENT REGULATIONS
dc.subject	IDS
dc.subject	INCOME CATEGORIES
dc.subject	INCOME GROUP
dc.subject	INCOME LEVELS
dc.subject	INFORMAL FINANCE
dc.subject	INFORMAL FINANCING
dc.subject	INITIATIVE
dc.subject	INSTRUMENT
dc.subject	INTERNATIONAL BANK
dc.subject	INVESTMENT CLIMATE
dc.subject	INVESTMENT FUND
dc.subject	JUSTICE
dc.subject	LAWS
dc.subject	LEGAL CONSTRAINTS
dc.subject	LEVEL PLAYING FIELD
dc.subject	LICENSES
dc.subject	LOAN
dc.subject	MARGINAL TAX RATES
dc.subject	MONEYLENDER
dc.subject	OBSTACLES TO GROWTH
dc.subject	OPERATING COSTS
dc.subject	OPTIMAL DEBT STRUCTURE
dc.subject	OVERDRAFT
dc.subject	OVERDRAFT FACILITY
dc.subject	OWNERSHIP STRUCTURE
dc.subject	OWNERSHIP STRUCTURES
dc.subject	PERSONAL GAIN
dc.subject	POLICE
dc.subject	POLITICAL CORRUPTION
dc.subject	POLITICAL ECONOMY
dc.subject	POLITICIANS
dc.subject	PRIVATE CREDIT
dc.subject	PRIVATE GAIN
dc.subject	PRIVATE PARTIES
dc.subject	PRIVATE SECTOR
dc.subject	PROFIT MARGIN
dc.subject	PROFIT MARGINS
dc.subject	PROFITABILITY
dc.subject	PROPERTY RIGHTS
dc.subject	PROPRIETORSHIPS
dc.subject	PUBLIC
dc.subject	PUBLIC ECONOMICS
dc.subject	PUBLIC FINANCE
dc.subject	PUBLIC FINANCES
dc.subject	PUBLIC OFFICIALS
dc.subject	PUBLIC SECTOR
dc.subject	PUBLIC SECTOR REFORM
dc.subject	REFORM PROGRAMS
dc.subject	REINVESTMENT
dc.subject	REINVESTMENT RATES
dc.subject	REVENUE COLLECTION
dc.subject	SALES GROWTH
dc.subject	SALES REVENUE
dc.subject	SELF-FINANCE
dc.subject	SHADOW ECONOMY
dc.subject	SHAREHOLDERS
dc.subject	SOCIAL CAPITAL
dc.subject	SOCIAL SECURITY
dc.subject	STOCK MARKET
dc.subject	TAX
dc.subject	TAX AVOIDANCE
dc.subject	TAX BURDEN
dc.subject	TAX COLLECTION
dc.subject	TAX COMPLIANCE
dc.subject	TAX EVASION
dc.subject	TAX RATES
dc.subject	TAX REGULATION
dc.subject	TAX REPORTING
dc.subject	TAXATION
dc.subject	TAXPAYER COMPLIANCE
dc.subject	TAXPAYERS
dc.subject	TELEPHONE LINE
dc.subject	THEFT
dc.subject	TRANSACTION
dc.subject	TRANSITION COUNTRIES
dc.subject	TRANSITION ECONOMIES
dc.subject	TRANSPARENCY
dc.subject	VIOLENCE
dc.subject	WORKING CAPITAL
dc.title	Are Innovating Firms Victims or Perpetrators? Tax Evasion, Bribe Payments, and the Role of External Finance in Developing Countries
dc.type	Publications & Research :: Policy Research Working Paper