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Towards a theory of corruption, nepotism, and new venture creation in developing countries

Towards a theory of corruption, nepotism, and new venture creation in developing countries
Mawuli P. Gavor; Bryan T. Stinchfield
International Journal of Entrepreneurship and Small Business, Vol. 18, No. 1 (2013) pp. 1 – 14
The dominant view among social scientists and policy makers has been that corruption has a mostly negative effect on economic growth – especially in developing countries. However, some scholars have shown support for the efficient grease hypothesis (EGH), which is that corruption can increase the efficiency of some economic transactions. Based on the EGH and Hofstede’s (1983) work on national culture, we theorise that and corruption in developing countries facilitates the new venture creation process, and thereby reinforces the persistent nature of corruption. Implications for policy makers are also discussed.

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