A2.1: Description of the Data Used in the Study
Variable name Source Definition Descriptive
statistics Corruption in
Import/Export Permits
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
In your industry, how commonly would you estimate that firms make undocumented extra payments or bribes connected with export and import permits? (1 = common, 7 = never occurs)
Mean= 4.65 Standard deviation=1.16 Corruption in Access to
Public Utilities
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
In your industry, how commonly would you estimate that firms make undocumented extra payments or bribes when getting connected to public utilities (eg, telephone or electricity)? (1 = common, 7 = never occurs)
Mean=4.98 Standard deviation=1.22
Corruption in Tax Payments
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
In your industry, how commonly would you estimate that firms make undocumented extra payments or bribes connected with annual tax payments? (1 = common, 7 = never occurs)
Mean=4.76 Standard deviation=1.24 Corruption in Investment
Contracts
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
In your industry, how commonly would you estimate that firms make undocumented extra payments or bribes connected with public contracts (investment projects)? (1 = common, 7 = never occurs)
Mean=3.90 Standard deviation=1.18
Corruption in Loan Applications
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
In your industry, how commonly would you estimate that firms make undocumented extra payments or bribes connected with loan applications? (1 = common, 7 = never occurs)
Mean=4.87 Standard deviation=1.07 Corruption in Legislation World Economic Forum’s (WEF)
Global Competitiveness Report 2003/04
In your industry, how commonly would you estimate that firms make undocumented extra payments or bribes connected with influencing laws and policies, regulations, or decrees to favor selected business interests? (1 = common, 7 = never occurs)
Mean=4.15 Standard deviation=1.12 Corruption in Judiciary World Economic Forum’s (WEF)
Global Competitiveness Report 2003/04
In your industry, how commonly would you estimate that firms make undocumented extra payments or bribes connected with getting favorable judicial decisions? (1 = common, 7 = never)
Mean=4.15 St.Dev.=1.38
Corruption World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
Average of the seven subcomponents outlined above Mean=4.53 Standard deviation=1.14 Component 1: Absence
of Corruption
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
Retained first component after principal component analysis applied to the seven components of corruption detailed above.
The first component depicts the absence of corruption
Mean=30.20 Standard deviation=7.56 Component 2: Grand
Type of Corruption
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
Retained second component after principal component analysis applied to the seven components of corruption detailed above.
The second component describes the type of corruption with high values related to the grand type.
Mean=0.46 Standard deviation=0.40 Grand-Petty Corruption Gallup/Transparency International
Survey, Voice of the People 2004
Difference between separate questions on perceptions of grand and petty corruption considered as (i) not a problem at all; (ii) not a particularly big problem; (iii) a fairly big problem); (iv) a very big problem. The difference is interpreted as a crude measure of the prevalence of grand over petty corruption.
Mean=0.16 Standard deviation=0.13
Opportunism in corrupt deals
World Bank/University of Basel Survey for World Development Report 1997
If a firm pays the required 'additional payment' the service is usually also delivered as agreed.
1=Always; 6=Never
Mean=3.17 Standard deviation=0.69 Net FDI Inflows World Development Indicators Net FDI Inflows as a percentage of GDP for the period 1994 to
2002. Notice that the dependent variable in the regressions is a logistic transformation of 1 plus this variable to avoid values around zero.
Mean=3.52 Standard deviation=2.98 Gross FDI Inflows International Financial Statistics,
International Monetary Fund
Gross FDI Inflows as a percentage of GDP for the period 1995 to 2003. Notice that the dependent variable in the regressions is a logistic transformation of 10 plus this variable to avoid values below zero.
Mean=1.59 Standard deviation=0.38 Fuel Exports World Development Indicators Export of fuels relative to merchandise exports, average
1994-2003
Mean=10.81 Standard deviation=20.61 Growth of GDP
1990-1995
World Development Indicators Growth rate of GDP, average 1990-1995 Mean=2.28 Std.dev.=4.31
Openness (% of GDP) World Development Indicators The sum of exports and imports of goods and services relative to the GDP, average 1996-2002
Mean=80.12 Standard deviation=47.30
Population World Development Indicators Population, 2001, logged Mean=2.73
Standard deviation=1.51 Absence of legal political
donations
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
To what extent do legal contributions to political parties have a direct influence on specific public policy outcomes?
1= very close link between donations and policy;
7= little direct influence on policy
Mean=3.82 Standard deviation=0.85
Absence of illegal political donations
World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
Prevalence of illegal political donations is 1= very low, 7= very high.
Mean=3.54 Standard deviation=1.21 Public trust in politicians World Economic Forum’s (WEF)
Global Competitiveness Report 2003/04
Public trust in the financial honesty of politicians is 1= very low, 7= very high.
Mean=2.72 Standard deviation=1.23 Bureaucratic Red Tape World Economic Forum’s (WEF)
Global Competitiveness Report 2003/04
How much time does your firm’s senior management spend dealing/negotiating with government officials (as a percentage of work time)?
1=0%; 2=1-10%; 3=11-20%;[…];8= 81-100%
Mean=2.75 Standard deviation=0.46
Law and Order International Country Risk Guide 1998
Expert assessments on law and order tradition in a country on a scale from 0 to 6 with higher values indicating more favourable conditions
Mean=4.31 Standard deviation=1.31 Bureaucratic Quality International Country Risk Guide
1998
Expert assessments on the quality of bureaucracy in a country on a scale from 0 to 4 with higher values indicating more favourable conditions
Mean=2.49 Standard deviation=1.13 Absence of Civil
Liberties
Freedom House, Freedom in the World, 2000/2001
Expert assessments of civil liberties in a country on a scale from 1 to 7 with lower values indicating more favourable conditions.
Mean=3.02 Standard deviation=1.45
Judicial Independence World Economic Forum’s (WEF) Global Competitiveness Report 2003/04
The judiciary in your country is independent from political influences of members of government, citizens or firms 1= No, heavily influenced; [..]; 7= Yes, entirely independent
Mean=3.92 Standard deviation=1.46 Distance to Global
Investors
Based on latitude and longitude data from CIA Factbook
Sum of the distance to Chicago and to Frankfurt, calculated using a spherical trigonometry formula.
Mean=2.23 Standard deviation=0.99