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We propose a methodology for gravity models which overcomes weakness of institutional distance measures identified in international business literature (Shenkar, 2001). Our methodology is based on combination of the distance approach with cluster analysis of states according to their...
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-monetary disincentives to corruption. In doing so, we also test the Beckarian prediction that at the same level of expected payoff, a low … probability of detection with high penalty is a stronger deterrent to corruption than a high probability of detection with low …
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