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

Corruption and Economic Growth: The Effects of Business Ethics 122 3. Findings The results show that the influence of corruption on economic growth differs for developed and emerging countries. For developed countries, the “ sand the wheels ” viewpoint is supported; while for the emerging countries, the “ grease the wheels ” viewpoint is supported. Similarly, the results of this paper show that business ethics have a positive effect on the economic growth of developed countries, and a negative effect on the economic growth of emerging countries. In addition, this study finds that business ethics help reduce the negative impact of corruption on the economic growth of developed countries; and can reduce the positive impact of corruption on the economic growth of emerging countries. In other words, business ethics weaken the influence of corruption on economic growth. To improve the reliability of this study, this study conducts four robustness tests. The first involves the use of panel data with fixed effect model, which yields similar results to those of the system GMM. The second involves controlling the possible non-linear relationship between corruption and economic growth. Some literature have shown that there is a non-linear relationship between corruption and economic growth, thus this study adds the square of the corruption to the empirical model, lands consistent results. The third involves further data analysis for emerging countries since the empirical results of this study shows that corruption has positive influences on the economic growth of emerging countries, which is consistent with the results of previous literature which have stated that under certain conditions, corruption is conducive to economic growth. This study adds four new control variables namely, political stability, democracy, government effectiveness, and religion, in order to verify the robustness of emerging countries. The fourth involves the exclusion of outliers. 4. Implications This study finds that improving business ethics helps reduce corruption and weaken its effect on economic growth. Namely, the findings lend support to the promotion of business ethics in both enterprises and government. For enterprises, the following may be accomplished to establish business ethics: (1) promoting ethical construction from top managers; (2) setting ethical goals; (3) developing and implement business ethics codes; (4) establishing an ethics committee; (5) strengthening employees’ ethics education; and (6) establishing an organizational culture that values business ethics. For the government,