Corruption and long-term investment of businesses in Vietnam

Lai Cao Mai Phuong
2020 Journal of Project Management  
This paper investigates the effects of corruption and long-term investment of businesses in Vietnam using the General Least Square (GLS) estimation method for businesses in 63 provinces in Vietnam from 2016-2018. The results show that corruption was an important factor affecting the long-term investment decisions of Vietnamese enterprises. The ability to predict corruption of businesses can explain the phenomenon of part of the cash flow of businesses flowing out of production and business.
more » ... n and business. Informal costs related to low-level administrative procedures act as "grease" to help businesses reduce time costs, but when the total amount of unofficial expenses exceeds 10% of revenue of businesses, they become a burden for businesses and restrain them from making long-term investments. Corrupted public officials' behavior has led businesses to misallocate resources and prevent them from making long-term investments. The result shows that the East Asia paradox holds only for the case of informal costs related to administrative procedures in Vietnam.
doi:10.5267/j.jpm.2020.7.001 fatcat:rkaiwvlnbfdzdp4kyjbsz7jnwa