Using World Bank Enterprise Survey data on bribery and patent applications, we try to study the causal linkage between firm level innovation and corruption in India. Specifically, we try to understand if corruption impacts innovation at the firm level. Since we find that innovation and corruption are jointly determined, we propose instrumental variables regression approach to identify this causal effect. We instrument bribery by exogenously determined external audit parameter and then use a recursive bivariate probit model combined with industry-fixed effects to reach our results. Our findings suggest that bribery has an adverse impact on innovation. The results of our study are much in contrast to the existing literature, which largely supports a positive relationship between innovation and corruption.

中文翻译：

---

创新与腐败：使用印度专利申请信息剖析因果关系

利用世界银行企业调查关于贿赂和专利申请的数据，我们试图研究印度公司层面创新与腐败之间的因果关系。具体来说，我们试图了解腐败是否会影响公司层面的创新。由于我们发现创新和腐败是共同决定的，我们提出了工具变量回归方法来识别这种因果关系。我们通过外生确定的外部审计参数来检测贿赂，然后使用递归双变量概率模型结合行业固定效应来得出我们的结果。我们的研究结果表明，贿赂会对创新产生不利影响。我们的研究结果与现有文献大相径庭，后者在很大程度上支持创新与腐败之间的正相关关系。