The moderating role of economic uncertainty via corruption on investment: evidence from European firm level
by Sagi Akron; Ender Demir; José María Díez-Esteban; Conrado Diego García-Gómez
European J. of International Management (EJIM), Vol. 22, No. 2, 2024

Abstract: This paper uniquely examines the moderation effect of economic uncertainty via corruption's impact on the firm level investment. By using a sample of firms from 30 countries in Europe for the period 2011-2020, we first observe a direct negative effect of either economic uncertainty or corruption on firms' capital expenditures. More importantly, we crucially find a positive moderation effect of uncertainty on corruption, amplifying corruption's impact on the corporate investment. The findings, robust to country, industry and time fixed-effects, shed important light on the East-Asian countries growth puzzle.

Online publication date: Wed, 10-Jan-2024

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