Clarke, George (2011): Lying about firm performance: Evidence from a survey in Nigeria.
Download (213kB) | Preview
It is difficult to be sure that managers in developing countries report financial information accurately and truthfully during firm surveys. The most common concern is that managers might under-report performance to avoid attracting attention from the tax authorities or corrupt bureaucrats. Using a method developed in the literature on corruption, this paper identifies managers who appear to be reticent or deceptive and compares their answers with the answers of non-reticent managers. The paper shows that reticent managers report that their firms are more, not less, productive than non-reticent managers. The paper then assesses possible reasons for this, finding that the most likely explanation is that reticent managers exaggerate performance so that they or their firms look good. Because past studies have found that reticent managers appear to lie about other aspects of firm and manager behavior—including underreporting corruption—this suggests that it will be difficult to fully assess how these behaviors affect firm performance unless reticence is controlled for.
|Item Type:||MPRA Paper|
|Original Title:||Lying about firm performance: Evidence from a survey in Nigeria|
|Keywords:||Reticence; Nigeria; Firm Surveys; Corruption; Labor Productivity|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption
?? C42 ??
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
|Depositing User:||George R.G. Clarke|
|Date Deposited:||13. Dec 2011 21:12|
|Last Modified:||20. Feb 2013 10:23|
Azfar, Omar, and Peter Murrell. 2009. "Identifying Reticent Respondents: Assessing the Quality of Survey Data on Corruption and Values." Economic Development and Cultural Change 57(2):387–411.
Biggs, Tyler, Vijaya Ramachandran, and Manju Kedia Shah. 1998. "The Determinants of Enterprise Growth in Sub-Saharan Africa: Evidence from the Regional Program on Enterprise Development." World Bank, Regional Program for Enterprise Development Discussion Paper 103. Washington, D.C.
Clausen, Bianca, Aart Kraay, and Peter Murrell. 2010. "Does Respondent Reticence Affect the Results of Corruption Surveys? Evidence from World Bank Enterprise Survey for Nigeria." Policy Research Working Paper 5415. World Bank, Washington DC.
de Mel, Suresh, David J. McKenzie, and Christopher Woodruff. 2009. "Measuring Microenterprise Profits: Must We Ask How the Sausage Is Made?" Journal of Development Economics 88(1):19–31.
Fox, James Alan, and Paul E Tracy. 1986. Randomized Response: A Method for Sensitive Surveys. Newbury Park, CA: Sage Publications.
Goldberger, Arthur S. 1964. Econometric Theory. New York, NY: John Wiley.
Iarossi, Giuseppe. 2006. The Power of Survey Design. Washington DC: World Bank.
Iarossi, Giuseppe, and George R. G. Clarke, eds. 2011. Nigeria 2011: An Assessment of the Investment Climate in 26 States. Washington DC: World Bank.
Iarossi, Giuseppe, Peter Mousley, and Ismail Radwan. 2009. An Assessment of the Investment Climate in Nigeria. Washington DC: World Bank.
Jensen, Nathan M., Quan Li, and Aminur Rahman. 2010. "Understanding Corruption Using Cross-National Firm-Level Surveys." Journal of International Business Studies 41(9):1481–1504.
Jensen, Nathan M., and Aminur Rahman. 2011. "The Silence of Corruption : Identifying Underreporting of Business Corruption through Randomized Response Techniques." Policy Research Working Paper 5696. World Bank, Washington DC.
Lensvelt-Mulders, Gerty J. L. M., Joop J. Hox, Peter G. M. Van Der Heuden, and Cora J. M. Maas. 2005. "Meta-Analysis of Randomized Response Research: Thirty-Five Years of Validation." Sociological Methods and Research 35(3):319–348.
Recanatini, Francesca, Scott Wallsten, and Lixin Colin Xu. 2000. "Surveying Surveys and Questioning Questions: Learning from World Bank Experience." Policy Research Working Paper 2307. World Bank, World Bank, Washington DC.