Corruption and growth under weak identification

Philip Shaw, Marina Selini Katsaiti, Marius Jurgilas

    Research output: Contribution to journalArticlepeer-review

    18 Citations (Scopus)

    Abstract

    The goal of this paper is to revisit Paolo Mauro's influential paper on corruption and growth focusing on the strength of his results under weak identification. The instrument used in his original paper is found to be "weak" as defined by the literature on weak instruments. Our results suggest that there is a high probability that the parameters of interest are locally almost unidentified. We also investigate other instruments commonly used in the corruption literature and obtain similar results. After identifying an instrument with sufficient strength, we fail to reject a zero effect of corruption on investment and economic growth. (JEL C31, D73)

    Original languageEnglish
    Pages (from-to)264-275
    Number of pages12
    JournalEconomic Inquiry
    Volume49
    Issue number1
    DOIs
    Publication statusPublished - Jan 2011

    ASJC Scopus subject areas

    • Business, Management and Accounting(all)
    • Economics and Econometrics

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