CEU Electronic Theses and Dissertations, 2015
| Author | Bondarev, Emil |
|---|---|
| Title | How Does Foreign Ownership Affect Administrative Corruption in Ukraine? |
| Summary | In 2013 Transparency International places Ukraine on the 144th place out of 175 in the ranking of the most corrupt countries in the world, among Nigeria, Iran, Cameroon, and Central African Republic. Yet, the new Ukrainian government pledged to converge with EU countries in economic and social matters in order to eventually apply for membership in the union. Such changes require a lot of investments, a significant part of which is expected to come from abroad. Corruption, being a strong repulse for FDI, needs to be taken very seriously in this regard. On the macro level corruption in Ukraine acts as a negative determinant of FDI, but some researchers suggest that on the firm level the effect may be reversed. Therefore, in this paper I evaluate the relationship between foreign ownership and administrative corruption in Ukraine and estimate the magnitude of impact. To do so I use a firm-level survey data provided by EBRD and The World Bank for 2009. I construct an instrument variable to address the issue of reverse causality. The results of the estimations support the hypothesis about positive relationship between foreign ownership and petty corruption. I suggest that foreign firms are more likely to corrupt, and such behavior encourages further demands of corruption, which results in a positive estimated relationship. I argue that it is crucial to break this link in order to attract more investment in Ukraine. This can be achieved by targeting corruption with a specially designed set of policies. |
| Supervisor | Lychagin Sergey |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2015/bondarev_emil.pdf |
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