Corruption and Firm Export Performance in Fragile Economies: Evidence from Zimbabwe

In this paper, we examine the relationship between corruption and firm export performance in Zimbabwe. Using a new panel data set of manufacturing and service firms from World Bank Enterprise survey and a methodology that relies on within-firm variation, we show that corruption increases the probability of exporting indirectly through intermediaries and decreases the probability of exporting directly. This result highlight that corruption is a cost to the economy in the absence of intermediaries. In addition, it highlights the importance of strong institutions that reduce corruption for business dynamism and economic growth.