Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States
We investigate the relationship between economic freedom and corruption using data from U.S. states covering almost a quarter of a century. Our study advances the existing literature on several fronts. First, instead of using subjective cross-country corruption indices assembled by various investmen...
| Main Authors: | , , |
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| Format: | Journal Article |
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Elsevier BV * North-Holland
2012
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| Online Access: | http://hdl.handle.net/20.500.11937/29915 |
| _version_ | 1848752938062708736 |
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| author | Apergis, Nicholas Dincer, O. Payne, J. |
| author_facet | Apergis, Nicholas Dincer, O. Payne, J. |
| author_sort | Apergis, Nicholas |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | We investigate the relationship between economic freedom and corruption using data from U.S. states covering almost a quarter of a century. Our study advances the existing literature on several fronts. First, instead of using subjective cross-country corruption indices assembled by various investment risk services, we use a more objective measure of corruption: the number of government officials convicted in a state for crimes related to corruption. Second, unlike previous studies, we exploit both time series and cross-sectional variation in the data in the estimation of a panel error correction model. The panel error correction model results show that in the long-run economic freedom, per capita income, and education have a negative and statistically significant impact on corruption whereas income inequality has a positive and statistically significant impact. The causality tests associated with the panel error correction model reveal bidirectional causality between economic freedom and corruption in both the short-run and long-run. |
| first_indexed | 2025-11-14T08:16:34Z |
| format | Journal Article |
| id | curtin-20.500.11937-29915 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T08:16:34Z |
| publishDate | 2012 |
| publisher | Elsevier BV * North-Holland |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-299152017-09-13T16:09:43Z Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States Apergis, Nicholas Dincer, O. Payne, J. Economic freedom Corruption Panel error correction model We investigate the relationship between economic freedom and corruption using data from U.S. states covering almost a quarter of a century. Our study advances the existing literature on several fronts. First, instead of using subjective cross-country corruption indices assembled by various investment risk services, we use a more objective measure of corruption: the number of government officials convicted in a state for crimes related to corruption. Second, unlike previous studies, we exploit both time series and cross-sectional variation in the data in the estimation of a panel error correction model. The panel error correction model results show that in the long-run economic freedom, per capita income, and education have a negative and statistically significant impact on corruption whereas income inequality has a positive and statistically significant impact. The causality tests associated with the panel error correction model reveal bidirectional causality between economic freedom and corruption in both the short-run and long-run. 2012 Journal Article http://hdl.handle.net/20.500.11937/29915 10.1016/j.ejpoleco.2011.10.001 Elsevier BV * North-Holland restricted |
| spellingShingle | Economic freedom Corruption Panel error correction model Apergis, Nicholas Dincer, O. Payne, J. Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States |
| title | Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States |
| title_full | Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States |
| title_fullStr | Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States |
| title_full_unstemmed | Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States |
| title_short | Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States |
| title_sort | live free or bribe: on the causal dynamics between economic freedom and corruption in u.s. states |
| topic | Economic freedom Corruption Panel error correction model |
| url | http://hdl.handle.net/20.500.11937/29915 |