CORRUPTION AND ITS IMPACT ON ENTREPRENEURSHIP IN NIGERIA

Abstract

Purpose: Emerging empirical literatures on corruption advocates that its impact on overall national economic performance and micro-level firm performance is inconclusive. As such corruption is said to either ‘grease’ or ‘sand’ in the wheels of entrepreneurship, affecting firm performance (at the micro-level) and, ultimately, economic growth (at the macro-level). This study examines this issue using unique and exceptionally rich indexes of Corruption Perception Index (CPI) as a proxy for Corruption and Global Entrepreneurship Index (GEI) as a proxy for Entrepreneurship. Design/Methodology/Approach: Review of the relevant academic literature and regression analysis was employed. Findings: From the result of analysis, since GEI assigns the highest scores to countries most favorable to entrepreneurship while the CPI gives its highest scores to countries perceived to be the least corrupt. Thus, a negative correlation suggests that the most corrupt countries have the strongest entrepreneurial ecosystems. Thus, it reveals that there exists an inverse relationship between corruption and entrepreneurship in Nigeria during the quarterly period of the study. Thus, depicting that corruption “grease the wheels of entrepreneurship”. Implications/Originality/Value: The contribution offers a comprehensive impact of the corruption on entrepreneurship development in Nigeria by employing a quarterly data for the period of 2012 to 2020 on entrepreneurship development in Nigeria and hints at promising areas of future research. Research limitations: The study employs only secondary data to access the impact of corruption on entrepreneurship in Nigeria for only the quarterly periods of 2012 to 2020 due to data availability.

Keywords

• Nigeria, corruption perception index, global entrepreneurship index, Covariance method