Corruption Effects on Private Enterprises Productivity in Developing Countries: Firm Level Evidence from Burkina Faso

It is difficult to thoroughly explain what leads private enterprises in Burkina Faso into the practice of corruption. The argument most often offered is that corruption provides some gains. In this article, we have attempted to determine if the practice of corruption helps small and medium-sized enterprises (SME) improve their productivity. The data were collected from 351 private SMEs in the two largest cities in Burkina Faso. The survey only covers enterprises dealing in the supply of materials and office supplies. After checking the endogeneity of corruption under the methods of Two-stage Probit least squares (TSPLS) and Heckman two stages, the results indicate that corruption negatively affects the SMEs that practice it at the scale of the entire sector studied. Nevertheless, when considering only the SMEs that take part in the government’s tender invitations, we notice that the SMEs that give bribes are more productive than those that do not.