This paper examines the effects of bribery on product and process innovation at the firm level in Latin American countries. We provide insights into the heterogeneous effects of bribery on the types of innovations across firms. Using the locality-sector average of bribe payments as a percentage of firm annual sales, we control for endogeneity bias, which is a recurring econometric problem in corruption-innovation studies. Overall, we find evidence to support the ‘sand the wheels’ hypothesis and argue that this negative effect is slightly higher in process innovation compared to product innovation. Using interaction terms to see the effects of bribery on different firm sizes and institutional structures, we find that bribery hurts firm innovation for micro and small firms, but not for large firms. The results also suggest that the negative effect of corruption on firm level innovation is stronger for firms in weak institutional environments than for firms in strong institutional settings. Practical interventions to promote strong institutional governance are not easy to arrange when corruption is endemic. Greater awareness of the extortionist environment of companies in these countries in the international community may bring pressures to bear for reform.

本文研究了拉丁美洲国家公司层面贿赂对产品和流程创新的影响。我们提供了关于贿赂对公司创新类型的异质影响的见解。使用贿赂支付的地区部门平均值作为公司年销售额的百分比，我们可以控制内生性偏差，这是腐败创新研究中反复出现的计量经济学问题。总体而言，我们找到了支持“砂轮”假设的证据，并认为与产品创新相比，流程创新中的负面影响要稍高一些。使用交互作用术语来查看贿赂对不同规模和机构结构的影响，我们发现贿赂损害了微型和小型企业的企业创新，但没有损害大型企业的创新。结果还表明，腐败对企业水平创新的负面影响，在制度环境较弱的公司要强于制度环境较弱的公司。在腐败盛行的情况下，为促进强有力的机构治理而采取的实际干预措施并不容易。这些国家在国际社会中对公司勒索环境的更多了解可能会带来改革的压力。