EXPLORING CORRUPTION AND INNOVATION DYNAMICS IN THREE MEXICAN FEDERAL ENTITIES

Abstract

This research reviews the “grease the wheels” and “sand the wheels” hypotheses about the positive or negative effects of corruption on innovation in federal entities of Mexico. There are two levels of study of these hypotheses, at the company level through surveys that capture the bribery variable, or through studies of macro indicators, with the perception of corruption variable. This study is inserted in the second perspective at the macro level. The work was carried out using multivariate analysis methodologies, on the one hand, with principal component analysis, and on the other with case studies. With the analysis of principal components, it is concluded that both hypotheses could be fulfilled only for some federal entities. With the analysis of case studies, we show the contexts in which every hypothesis works in Nuevo Leon (grease the wheels) and for Durango and Zacatecas (sand the wheels). This has important implications, since if these results are considered, innovative activity policies could improve if the vices imposed by corruption are combated, since this would release some transaction costs for companies derived from these activities, therefore, larger budgets do not necessarily lead to better results in science and technology.