The Shock of Corruption on GDP Per Capita: A Panel Data Postmortem on the South Asian Region

Author:Md. Mahmudul Hassan, Tareq Imam Zahid

Abstract:
Corruption is characterized as the exploitation of entrusted authority for personal advantage, often taking the form of illegal acts, deceit, or bribery, and is broadly regarded as harmful to economic progress. Although some research indicates that corruption might enhance certain economic activities, it is primarily perceived as a major obstacle to sustainable development on a global scale. The research question of this study is: What is the effect of corruption on GDP per capita in South Asian nations between 1995 and 2016? This investigation examines the link between corruption, as assessed by the Corruption Perception Index (CPI), and GDP per capita in South Asia. By employing a Generalized Least Squares (GLS) model, the study seeks to analyze the impact of corruption on GDP per capita. The results reveal a significant negative association between corruption and GDP per capita, indicating that corruption hinders economic growth in the region. Therefore, it is crucial for the governments of these nations to adopt effective strategies to address corruption and foster sustainable economic development.

Keywords:CPI, GDP Per Capita, Economic Growth, Generalized Least Square.

DOI:10.46333/ijtc/14/1/3

International Journal of Trade & Commerce (Vol: 14 Issue:1)