Skip to main content

Advertisement

SpringerLink
Log in

A Conceptual Framework for Constructing a Corruption Diffusion Index

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

In this paper, we propose a conceptual framework for constructing a diffusion index of changes in overall perceptions with respect to corruption. The corruption diffusion index we construct lies between 0 (the greatest overall deterioration in corruption perceptions) and 100 (the greatest overall improvement in corruption perceptions) with 50 (no change in corruption perceptions) as the critical reference. The proposed methodology is applied to the 2010/2011 global corruption barometer survey data. Possible refinements of the proposed methodology to capture the potentially multi-dimensional nature of corruption and the practical challenges associated with the empirical implementation are discussed.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. One example is the surveys used in the construction of the Bribe Payers Index (BPI). For an overview of BPI, see http://www.transparency.org/research/bpi/overview.

  2. For further details about the 2012 CPI and earlier CPIs see http://www.transparency.org/research/cpi/overview.

  3. For further details in the nature of the GCB questions and the methodology see Transparency International’s website http://www.transparency.org/research/gcb/overview.

  4. The reports are available at the ISM website http://www.ism.ws/ISMReport/?navItemNumber=22442. A similar methodology is also being used to construct PMIs for several other countries.

  5. For example, the World Bank’s Country Policy and Institutional Analysis (CPIA) measure of corruption also considers these three dimensions. The corruption measure constructed by the World Bank ranges from 1 (low corruption) to 6 (high corruption). For further details, see the World Bank Group, CPIA database at http://data.worldbank.org/indicator/IQ.CPA.TRAN.XQ.

  6. For further details about the principal components weighting schemes for composite indicators see, for example, Cho and Ogwang (2006, 2007).

References

  • Aidt, T. S. (2003). Economic analysis of corruption: A survey. The Economic Journal, 113, F632–F652.

    Article  Google Scholar 

  • Akça, H., Ata, A. Y., & Karaca, C. (2012). Inflation and corruption relationship: Evidence from panel data in developed and developing countries. International Journal of Economics and Financial Issues, 2, 281–295.

    Google Scholar 

  • Al-Marhubi, F. A. (2000). Corruption and inflation. Economics Letters, 66, 199–202.

    Article  Google Scholar 

  • Asiedu, E., & Freeman, J. (2009). The effect of corruption on investment growth: Evidence from firms in Latin America, sub-Saharan Africa, and transition countries. Review of Development Economics, 13, 200–214.

    Article  Google Scholar 

  • Bardhan, P. (1997). Corruption and development: A review of issues. Journal of Economic Literature, 35, 1320–1346.

    Google Scholar 

  • Beck, P. J., Maher, M. W., & Tschoegl, A. E. (1991). The impact of the foreign corrupt practices act on US exports. Managerial and Decision Economics, 12, 295–303.

    Article  Google Scholar 

  • Bentzen, J. S. (2012). How bad is corruption? Cross-country evidence of the impact of corruption on economic prosperity. Review of Development Economics, 16, 167–184.

    Article  Google Scholar 

  • Campos, J. E., Lien, D., & Pradhan, S. (1999). The impact of corruption on investment: Predictability matters. World Development, 27, 1059–1067.

    Article  Google Scholar 

  • Cho, D. I., & Ogwang, T. (2006). Conceptual perspectives on selecting the principal variables in the purchasing managers’ index. The Journal of Supply Chain Management, 42, 44–52.

    Article  Google Scholar 

  • Cho, D. I., & Ogwang, T. (2007). A conceptual framework for computing U.S. non-manufacturing PMI indexes. The Journal of Supply Chain Management, 43, 43–52.

    Article  Google Scholar 

  • Delavallade, C. (2012). What drives corruption? Evidence from North African firms. Journal of African Economies, 21, 499–547.

    Article  Google Scholar 

  • Dincer, O. C., & Gunalp, B. (2012). Corruption and income inequality in the United States. Contemporary Economic Policy, 30, 283–292.

    Article  Google Scholar 

  • Dobson, S., & Ramlogan-Dobson, C. (2010). Is there a trade-off between income inequality and corruption? Evidence from Latin America. Economics Letters, 107, 102–104.

    Article  Google Scholar 

  • Dutta, I., & Mishra, A. (2013). Does inequality affect corruption? Journal of Public Economic Theory, 15, 602–619.

    Article  Google Scholar 

  • ElBahnasawy, N. G., & Revier, C. F. (2012). The determinants of corruption: Cross-country-panel-data analysis. Developing Economies, 50, 311–333.

    Article  Google Scholar 

  • Enderle, G. (1997). A worldwide survey of business ethics in the 1990s. Journal of Business Ethics, 16, 1475–1483.

    Article  Google Scholar 

  • Goel, R. K., & Ram, R. (2013). Economic uncertainty and corruption: Evidence from a large cross-country data set. Applied Economics, 45, 3462–3468.

    Article  Google Scholar 

  • Gupta, S., Davoodi, H., & Alonso-Terme, R. (2002). Does corruption affect income inequality and poverty? Economics of Governance, 3, 23–45.

    Article  Google Scholar 

  • Gupta, S., de Mello, L., & Sharan, R. (2001). Corruption and military spending. European Journal of Political Economy, 17, 749–777.

    Article  Google Scholar 

  • Institute of Business Ethics. (2012). Surveys on business ethics, 2011. Business ethics briefing, Issue 23, February. Retrieved September 6, 2013, from http://www.ibe.org.uk/userfiles/surveys_2011.pdf.

  • Jain, A. K. (2001). Corruption: A review. Journal of Economic Surveys, 15, 71–121.

    Article  Google Scholar 

  • Knack, S., & Keefer, P. (1995). Institutions and economic performance: Cross-country tests using alternative institutional measures. Economics and Politics, 7, 207–227.

    Article  Google Scholar 

  • Lambsdorff, J. G. (1998). An empirical investigation of bribery in international trade. European Journal of Development Research, 10, 40–59.

    Article  Google Scholar 

  • Mauro, P. (1995). Corruption and growth. Quarterly Journal of Economics, 110, 681–712.

    Article  Google Scholar 

  • Mauro, P. (1998). Corruption and the composition of government expenditure. Journal of Public Economics, 69, 263–279.

    Article  Google Scholar 

  • Musila, J. W., & Sigue, S. P. (2010). Corruption and international trade: An empirical investigation of African countries. World Economy, 33, 129–146.

    Article  Google Scholar 

  • Napal, G. (2006). An assessment of the ethical dimensions of corruption. Electronic Journal of Business Ethics and Organization Studies, 11, 5–9.

    Google Scholar 

  • Okeahalam, C. C., & Bah, I. (1998). Perceived corruption and investment in Africa. South African Journal of Economics, 66, 364–386.

    Article  Google Scholar 

  • Olken, B. A. (2009). Corruption perceptions vs. corruption reality. Journal of Public Economics, 93, 950–964.

    Article  Google Scholar 

  • Treisman, D. (2000). The causes of corruption: A cross-national study. Journal of Public Economics, 76, 399–457.

    Article  Google Scholar 

  • Wei, S. J. (2000). How taxing is corruption on international investors? The Review of Economics and Statistics, 82, 1–11.

    Article  Google Scholar 

  • Wilhelm, P. G. (2002). International validation of the corruption perceptions index: Implications for business ethics and entrepreneurship education. Journal of Business Ethics, 35, 177–189.

    Article  Google Scholar 

  • Zelekha, Y., & Sharabi, E. (2012). Corruption, institutions and trade. Economics of Governance, 13, 169–192.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Brock University, 500 Glenridge Avenue, St. Catharines, ON, L2S 3A1, Canada

    Tomson Ogwang

  2. Goodman School of Business, Brock University, 500 Glenridge Avenue, St. Catharines, ON, L2S 3A1, Canada

    Danny I. Cho

Authors
  1. Tomson Ogwang
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Danny I. Cho
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Danny I. Cho.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Ogwang, T., Cho, D.I. A Conceptual Framework for Constructing a Corruption Diffusion Index. J Bus Ethics 125, 1–9 (2014). https://doi.org/10.1007/s10551-013-1904-y

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-013-1904-y

Keywords

JEL Classification

Search

Navigation