Corruption and innovation: Mixed evidences on bidirectional causality

This study is an attempt to address the causality direction between corruption and innovation. In the empirical approach a panel data for 21 European countries in the 2006-2016 period is used. In order to investigate if the causality is context dependent, four different subsamples are considered, namely, Continental countries, Nordic countries, PIIGS and V-4 countries. Using Granger causality test for panel data we find that in whole sample, corruption causes in a Grangerian sense the innovation, while innovation does not cause a la Granger corruption.