The nexus among corruption, public expenditure and economic growth: evidence from provinces of Vietnam

Abstract

This research investigated the impact of public expenditure in investment on the economic growth under the presence of corruption. Three stage least squares method is employed in order to indicate this effect in the panel data of 63 provinces/cities in Vietnam from the period 2008-2013. The findings are: (1) The lower corruption is associated with the lower in public expenditure in development investment; (2) The lower corruption has a positive effect on economic growth; (3) Public spending in development investment has a positive effect on economic growth and the presence of corruption do not reduce this effect; (4) The lower corruption has a positive effect on private investment; (5) In term of the openness, foreign investment can reduce corruption. Thereby, some implications have been proposed to foster the growth of economy.