Sumi Sharma

Date of Graduation

2017

Document Type

Dissertation

Degree Type

PhD

College

College of Business and Economics

Department

Economics

Committee Chair

Shuichiro Nishioka

Committee Co-Chair

Daniel Berkowitz

Committee Member

Brian Cushing

Committee Member

Stratford Douglas

Committee Member

Eugene Bempong Nyantakyi

Abstract

This dissertation examines the link between market competition and corruption for developing countries and top income inequality and corruption in the US. The first two chapters explore the link between firm-level markup and corruption for a global dataset. I test the hypothesis that high-markup firms are less likely to engage in corruption. To investigate this relationship, I use firm-level data from World Bank Enterprise Survey (WBES) for 95 developing countries from 10 manufacturing industries. I find that high markup firms that operate in less competitive environments are less likely to bribe. These results are robust across three other measures of competition and two measures of corruption. I also look at the response rate of these firms to bribe-related question from survey data. I find that higher markup firms are more likely to be in contact with public officials, less likely to engage in bribes, and more likely to not answer bribe-related questions. These results highlight the importance of sample selection bias on the measure of competition and reveals that high markup ?rms and government-owned enterprises can determine the likelihood of responses to corruption-related questions. The third chapter discusses the issue of top income inequality and corruption within the US. I find a positive correlation between top income inequality measured by the top 1\% and the top 0.1\% income share and state-level corruption. Further, the results are magnified and continue to hold when three instrumental variables are used to exploit the exogenous variation in income inequality. These results suggest a policy focused on redistributive income as a means to tackle political corruption in the US.

Download

Share

COinS