International validation of the corruption perceptions index: Implications for business ethics and entrepreneurship education

Abstract

International government and corporate corruption is increasingly under siege. Although various groups of researchers have quantified and documented world-wide corruption, apparently no one has validated the measures. This study finds a very strong significant correlation of three measures of corruption with each other, thereby indicating validity. One measure was of Black Market activity, another was of overabundance of regulation or unnecessary restriction of business activity. The third measure was an index based on interview perceptions of corruption (Corruption Perceptions Index or CPI) in that nation. Validity of the three measures was further established by finding a highly significant correlation with real gross domestic product per capita (RGDP/Cap). The CPI had by far the strongest correlation with RGDP/Cap, explaining over three fourths of the variance. Corruption is increasingly argued to be a barrier to development and economic growth. Business students often do not see ethics courses as being as relevant as other value free disciplines or core courses. The data in this study suggests otherwise. Sustainable economic development appears very dependent on a constant, virtuous cycle that includes cormption fighting, and the maintenance of trust and innovation, all reinforcing each other.