CORRUPTION, FOREIGN OWNERSHIP STRUCTURE, AND PRODUCTIVITY: FIRM LEVEL EVIDENCE FROM MANUFACTURING INDUSTRY IN INDONESIA

Abstract

This dissertation consists of two studies that investigate the effects of corruption on two important aspects of firm growth: productivity and foreign ownership. To study these corruption’s effects, I examine corruption from two dimensions—pervasiveness and arbitrariness—within a single country, Indonesia. Pervasiveness reflects the likelihood that a firm will be required to engage in a corrupt transaction. Arbitrariness refers to the likelihood that a corrupt transaction will produce its desired result.