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Document Type

Article Restricted

Publication Date

11-2014

Journal Title

Journal of International Economics

Volume Number

94

Issue Number

2

First Page

277

Last Page

294

Abstract

This paper investigates how corruption affects firm behavior. Using an original and unusually rich dataset on bribe payments at ports matched to firm-level data, we observe how firms adapt to different types of corruption by adjusting their transport strategies. Our results suggest that firms respond to the price effects of corruption, organizing production in a way that increases or decreases demand for the public service.

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