We examine whether political corruption impedes innovation. Using a comprehensive sample of US firms, we find that … corruption has a substantial, negative relation with the quantity and quality of innovation. These results are robust to using … various fixed effects, proxies for corruption and innovation, and subsamples. To establish causality, we employ two …

authorization and strict authorization. We find that corruption plays a critical role in the choice of the authorization regime …. Corruption exacerbates the costs of using lenient authorization, under which production of socially harmful goods is always … authorized. In contrast, corruption can be socially beneficial under strict authorization, since it can mitigate an over …

authorization and strict authorization. We find that corruption plays a critical role in the choice of the authorization regime …. Corruption exacerbates the costs of using lenient authorization, under which production of socially harmful goods is always … authorized. In contrast, corruption can be socially beneficial under strict authorization, since it can mitigate an over …