Corruption and long-term investment of businesses in Vietnam

Abstract: This paper investigates the effects of corruption and long-term investment of businesses in Vietnam using the General Least Square (GLS) estimation method for businesses in 63 provinces in Vietnam from 2016-2018. The results show that corruption was an important factor affecting the long-term investment decisions of Vietnamese enterprises. The ability to predict corruption of businesses can explain the phenomenon of part of the cash flow of businesses flowing out of production and business. Informal costs related to low-level administrative procedures act as “grease” to help businesses reduce time costs, but when the total amount of unofficial expenses exceeds 10% of revenue of businesses, they become a burden for businesses and restrain them from making long-term investments. Corrupted public officials' behavior has led businesses to misallocate resources and prevent them from making long-term investments. The result shows that the East Asia paradox holds only for the case of informal costs related to administrative procedures in Vietnam.

How to cite this paper

 Phuong, L. (2020). Corruption and long-term investment of businesses in Vietnam.Journal of Project Management, 5(4), 237-244.

Refrences

Censogor (2017). Anti-corruption in doing business: an assessment from enterprise perspective. Con-sultation workshop on two reports surveying practical business integrity experience in Vietnam. Hanoi. 20th Ferbruary 2017.
De Jong, G., Tu, P. A., & van Ees. H. (2012). Which entrepreneurs bribe and what do they get from it? Exploratory evidence from Vietnam. Entrepreneurship Theory and Practice, 36(2), 323-345.
Huong, V. V., Tuyen, T. Q., Tuan, Ng. V., & Steven. L. (2018). Corruption. types of corruption and firm financial performance: New evidence from a transitional economy. Journal of Business Eth-ics, 148(4), 847-858.
Egger, P., & Winner, H. (2006). How corruption influences foreign direct investment: A panel data study. Economic Development and Cultural Change, 54(2), 459-486.
Lambsdorff, J. G. (2003). How corruption affects productivity. Kyklos, 56(4), 457-474.
Leff, N. H. (1964). Economic development through bureaucratic corruption. American behavioral scientist. 8(3). 8-14.
Lui, F. T. (1985). An equilibrium queuing model of bribery. Journal of Political Economy, 93(4). 760-781.
Mauro, P. (1995). Corruption and growth. The Quarterly Journal of Economics, 110(3), 681-712.
Méon, P. G., & Sekkat, K. (2005). Does corruption grease or sand the wheels of growth? Public choice, 122(1-2), 69-97.
MOPI (2019). The White Book on Vietnamese Businesses 2019. General Statistics Office of the Minis-try of Planning and Investment. Hanoi, Vietnam.
MOPI (2020). The White Book on Vietnamese Businesses 2020. General Statistics Office of the Minis-try of Planning and Investment. Hanoi, Vietnam.
Reinikka, R., & Svensson, J. (2004). Local capture: evidence from a central government transfer pro-gram in Uganda. The quarterly journal of economics, 119(2), 679-705.
VCCI (2016). Provincial Competitiveness Index in Vietnam. Hanoi. Vietnam.
VCCI (2017). Provincial Competitiveness Index in Vietnam. Hanoi. Vietnam.
VCCI (2018). Provincial Competitiveness Index in Vietnam. Hanoi. Vietnam.
Wedeman, A. (2003). Development and corruption: The East Asian paradox. In Political Business in East Asia (pp. 50-77). Routledge. https://doi.org/10.4324/9780203166338_chapter_1

Journals

JPM Volumes

Keywords

Authors

Countries

Journal of Project Management

Corruption and long-term investment of businesses in Vietnam Pages 237-244 Download PDF

Add Reviews