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AEC 2012 - Corruption and Small and Medium-Sized Enterprise Growth in Cameroon

16-Oct-2012

This paper uses data from a firm-level survey carried out in Cameroon to investigate the types of public services for which small and medium-sized enterprises pay bribes, the characteristics of these transactions and to estimate the impact of bribe payments on the SMEs growth. The results show that tax inspectors, police officers, hygiene and epidemiological officers, Officials from ministries and other public bodies, customs officers and Electricity officers exercise pressure on business people most often for informal payment. Bank staff and telecommunication officers are assessed as being the least corrupt. The econometric assessment of the correlation between corruption and firm performance reveals that bribe payments significantly slow SMEs growth. The firms’ age, market share, involvement in international trade impact positively on firm growth, while frequent contact with public services negatively affects the growth of firms. The key message is that unofficial payments are costly to SMEs in monetary terms and in terms of unfulfilled transactions.

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