Corruption and capital investment's implications on the productivity of ASEAN-5 countries

• Main Authors: Chen, Edric, de La Vega, Marty, de Leon, Leanne, Reyes, Rossvern
• Format: text
• Language: English
• Published: Animo Repository 2007
• Subjects: Corruption > Southeast Asia; Capital investments > Southeast Asia; Economic development; Economics
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/14371
• Institution: De La Salle University

Numerous studies have proved the negative relationship between corruption and economic productivity and positive relationship between investment and economic productivity. The detrimental effect of corruption on the productivity of the economy is also consistent with the public notion. But this is not applicable for most East Asian countries where data manifest high corruption and high growth at the same time-this is the so called East Asian paradox. The study aims to find evidence if there is really a paradox in five South East Asian economies productivity. This study also wants to find out the extent of how capital investment per worker could increase productivity. The study employed a panel data regression using data from ASEAN-5 countries covering the years from 1996 to 2005. This study finds evidence that in the long-term, corruption is not a significant and not a direct factor of economic productivity. Capital investment turns-out to be consistently significant.