CORRUPTION AND BUSINESS GROWTH: THE CASE OF AFRICAN FRANC ZONE COUNTRIES

This paper analyses the impact of corruption on the growth of companies in African countries of the Franc zone. The analysis shows that the 14 African countries of the Franc zone are more corrupt than the countries of North Africa and that some Anglo-Saxon African countries. These countries therefore have much lower business growth than those two African group countries. Theoretically, we used a Cobb-Douglas production function to establish a relationship between the corruption rate and the added value of the firm. The econometric analysis has shown that corruption is negatively and significantly correlated with the growth of the added value of Franc zone companies. For example, a decrease in corruption to a 10%, leads to an increase in overall added value of 1.35 percentage point. This result implies some economic policy recommendations, in particular the establishment of transparency and competence in the award of public contracts.