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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
JANURAY 2011
VOL 2, NO 9
officials. It can reduce the corruption if foreign aid helps to improve the shortages of revenues
and increase in the salaries of public employees.
Axel et al, (2005) investigated that corruption has a negative impact on the level of GDP,
economic growth, investment activity, international trade and price stability. By the cross
sectional study it was found that the cost of being more corrupt is really large.
Bryan (1999) investigated that three cultural variables; high uncertainty avoidance, high
masculinity means maleness, and high power distance are positively correlated with
corruption. It was also found that government size has no relationship with corruption but the
correlation seems between government size and corruption might be due to power distance
variable. It was not found any evidence of relationship between unequal distribution of
income and corruption.
Andrei et al, (1993) argued that corruption is costly to economic development because of the
failure of the government to control its agencies and departments form corruption. This
happens when agencies have freedom to enter in regulations. The second reason is the
misrepresentation of privacy of corruption. The requirement of confidentially can shift the
countries investment from the highest value projects to useless projects.
Kwabena (2002) argued that corruption is the factor that affects the economic growth and
income distribution that affect the poor more than rich. It is also investigated that corruption
has an impact on the economic growth through the reduction in investment.
Carlos (2003) investigated that long run rate of inflation and long run growth rate are
adversely correlated with each other in a country; the correlation among these twos can be
scanned by using the supernatural scrutiny, non structural, and low frequency of view point.
Shang (2000) investigated that whether there is the increase in the tax rate or the corruption
level, foreign direct investment will be effected. If there is the increase in the tax rate on the
multinational firm then the investor will avoid investing in that country. Similarly the case
with corruption rate, when the corruption rate is high in a country where investor is just
looking for foreign direct investment, he will switch his decision towards that country that will
offer low tax rate
Mohsen et al, (2005) investigate that there is an impact of corruption on exchange rate. It was
argued that corruption can increase both the demand and supply of the foreign exchange in the
black market; corruption has an impact on black market in terms of positive and negative. If
there is the increase in demand for foreign currencies then premium will increase.
Jakob (2005) investigated that the long-established methods to improve the governance
system have not much ability to battle with the corruption. It was argued that trialing of new
apparatus and assessment of new apparatus to improve the answerability should be the priority
of a researcher to become a rock in front of the corruption.
Philip (1997) investigated that the process of linking the happiness possessions of financial
revolutions to sincerity have no impact on the trade terms of the country but the relation can
be due to imperfect competition and nominal price inflexibility in the non-traded sector.
Paolo (2004) found the affects of corruption by investigating the answers of two questions that
were; why countries trapped in nasty loop of general corruption and low economic growth? If
the cost of corruption is high then why many countries do not struggle to make institutions
effective? Against these questions it is found that individuals do no have the inducement to
fight with corruption.
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