Corruption and Economic Growth: The Effects of Business Ethics

Abstract

There are two opposing perspectives regarding the influence of corruption on economic growth: "grease the wheels" and "sand the wheels". This paper explores the influence of corruption and business ethics on economic growth, and the effects of business ethics on the relationship between corruption and economic growth. The results show that corruption influences the economic growth of developed and emerging countries differently. For developed countries, the "sand the wheels" viewpoint is supported; while for emerging countries, the "grease the wheels" viewpoint is supported. Similarly, the results of this paper show that business ethics influence the economic growth of developed and emerging countries differently. Business ethics have a positive influence on the economic growth of developed countries, and a negative influence on the economic growth of emerging countries. In addition, the results show that business ethics can reduce the negative impact of corruption on the economic growth of developed countries, and reduce the positive influence of corruption on the economic growth of emerging countries. In short, business ethics weaken the influences of corruption on economic growth.