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Wednesday, October 23, 2013

Affect of transnational corruption on host country firms innovation behaviour

Researchers Alexis Habiyaremye  and Wladimir Raymond focus on rarely discussed topic- impact of MNCs corruption on innovation behaviour of local firms in transition economies. 

This is known for long that many Indian innovations failed to take off as customers both in government and in private sector favoured MNCs for kick-backs ranging from free foreign trip to over-invoicing.

Using firm-level data from the Business Environment and Enterprise Performance Survey, the researchers show that the involvement of foreign firms in corruption practices reduces the propensity of firms in host countries to invest in research and development and harms their ability to improve their existing products and services.

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