Mohamed Zakaria

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Mohamed Zakaria
Ph.D. candidate
Islamic Economics & Finance
Sakarya University, Türkiye.
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The Impact of Corruption on Nigerian Enterprises’ Performance: An Empirical Study

June 18, 2022


This study aims to assess the effects of corruption on Nigerian enterprises’ performance using data from the World Bank’s Enterprises Survey, (Panel Data) for the years 2007, 2009, and 2014. The pooled regression model was applied. Corruption was measured by six indicators divided into two groups, graft incidence and the perceived need to make bribe payments. Graft incidence measures enterprises’ experiences with requests for bribe payments across five types of applications, namely (1) an electrical connection, (2) water connection, (3) phone connection, (4) construction-related permit, and (5) total annual informal payment to public officials. While the perceived need to make bribe payments is based on the answer to the question: (6) It is said that establishments are sometimes required to give gifts to public officials to ‘get things done. The study found that the enterprises that experienced a statistically insignificant bribe payment for the water connection and construction-related permits are statistically insignificant. Meanwhile, the level of firms expected to give gifts to public officers “to get things done”, especially related to the sale and purchase of fixed assets, is significant and positively affects the enterprises’ performance. The total payments to the public officers are significant and have negative effects, which indicates the medium or long-term impacts. This may be explained by the fact that developing economies are characterized by formal institutional flaws such as ineffective public administration and a weak rule of law. It can also be explained by the theory of transaction cost, which states that the high transaction cost leads to a decrease in profits and thus poor performance. Unlike other studies, this study indicates that corruption represents an obstacle to Nigerian enterprises’ performance. The argument is that public authorities should move away from increasing the costs of corruption by improving the performance of public officials and implementing standards of transparency. Entrepreneurs also must search for alternatives to avoid paying bribes, such as leasing financing, and so on.


Corruption, performance, enterprises, World Bank’s Enterprise Surveys, Nigeria

Article Details

Journal Name: Bilgi Sosyal Bilimler Dergisi

Primary Language: English
Subjects: Business, Finance
Journal Section: Articles
Author/s: Mohamed Zakaria FODOL (Primary Author)
Author Affiliation: Sakarya University
ORCID: 0000-0002-8935-4846
Publication Date: November 30, 2021
Acceptance Date: March 22, 2021
Published in Issue: Year 2021, Volume 23, Issue 2, 315 – 340

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Posted in Academic Works, Publications
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