Corruption and Social Interaction: Evidence from China

We explore theoretically and empirically whether social interaction, including local and global interaction, influences the incidence of corruption. We first present an interaction-based model on corruption that predicts that the level of corruption is positively associated with social interaction. Then we empirically verify the theoretical prediction using within-country evidence at the province-level in China during 1998 to 2007. Panel data evidence clearly indicates that social interaction has a statistically significantly positive effect on the corruption rate in China. Our findings, therefore, underscore the relevance of social interaction in understanding corruption.


Issue Date:
2011-01
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/99686
Total Pages:
22
JEL Codes:
K420; D720; D640; O170; J240
Series Statement:
GC
9.2011




 Record created 2017-04-01, last modified 2017-04-04

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)