Corruption Impact on Total Factor Productivity – A Nonlinear Relationship
Corruption Impact on Total Factor Productivity – A Nonlinear Relationship

Summary/Abstract: The aim of the article is to examine the correlation between corruption and the total productivity of production factors. The study analyzed the significance of the impact of corruption on TFP and the type of this influence – linear and nonlinear. The study consisted of analyzing the most important theoretical arguments appearing in the literature for the possible impact of corruption on TFP. Next, a research hypothesis was formulated, which was verified on the basis of an empirical study. The results of the study indicate the relationship between corruption and TFP, and this relationship is nonlinear. Corruption affects TFP to varying degrees and it depends on the level of corruption in the country. In corrupt countries taking up the fight against corruption indicates much higher TFP increments than in non-corrupt countries. The article tackles the topic poorly described and analyzed in the literature. The impact of corruption on TFP is the subject of few studies, mainly made by foreign researchers.

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