臺大管理論叢 NTU Management Review VOL.30 NO.1

121 NTU Management Review Vol. 30 No. 1 Apr. 2020 Corruption and Economic Growth: The Effects of Business Ethics 1. Purpose Two opposing perspectives on the influence of corruption on economic growth are “ grease the wheels ” and “ sand the wheels ”. Corruption reflects failure in governance; therefore, anti-corruption measures need to start with changes in the structure of governance. In addition, there are “demanders” and “suppliers” in corruption activities. At present, the main literature focuses on the demand for suppressing corruption through national governance. Corruption is a serious problem both in developed and emerging countries; in the business world, corruptive attempts during business transactions to gain advantages over competition have been observed. Companies are therefore often seen as the flame that encourages corruption. Some literature advocate that supply side (enterprises) can suppress corruption through private institutions such as corporate governance and business ethics. These empirical studies have indicated that private institutions play an important role in combating corruption. In recent years, issues regarding anti-corruption and promotion of business ethics have received global attention. However, the results of empirical studies have not been entirely consistent. Moreover, some literature have indicated that business ethics inhibit corruption. This study is based on “enterprises”; it aims to explore the influence of corruption and business ethics on the economic growth of both developed and emerging countries. Furthermore, it aims to explore the effects of business ethics on the relationship between corruption and economic growth and the differences in the effects between developed and emerging countries. This study intends to verify whether business ethics help reduce corruption. Cross-national analysis adds to analyze the value of business ethics, and to provide evidence for the justification and necessity of advocating business ethics. 2. Design This study obtains data from 29 developed countries and 59 emerging countries from 2003 to 2014, and conducts empirical analysis using system generalized method of moments (system GMM). The advantages of this research method include mitigating endogenous problems, controlling fixed effects, and taking the inertia of economic growth into account. Tzu-Yun Tseng , Department of Public Finance, Feng Chia University