The effects of corruption on innovation and growth in Mexico

Abstract

This research reviews the Grease the Wheels (GTW) and Sand the Wheels (STW) hypotheses and the effects of corruption on innovation and economic growth. The study used principal component analysis methodologies and structural equation modeling. Employing the former, it is concluded that both hypotheses could be fulfilled, but only for some of the country s federal states. Meanwhile, in the case of structural equations, it is concluded that corruption facilitates innovative activity and economic growth (GTW). This has implications since it is shown that higher budgets for science and technology do not necessarily lead to better results in this field.