Border is better than distance? Contagious corruption in one belt one road economies

Employing data of one belt one road (OBOR) countries from 2002 to 2013, this study compares the contagious corruption difference between geographic border and distance through the dynamic spatial econometric model. The empirical results not only confirm that corruption in OBOR countries exists under various contagious channels, but also indicate that border effects, serving as contagious channels for corruption, are better than distance effects. The empirical implication is that OBOR countries with a common border tend to possess contagious corruption due to the hosts’ demonstration effect and the convenience of transferring illegal assets. We advise that those OBOR countries should enhance the supervision of cash flow, look for any opportunity of kicking back a portion of the stolen money, and establish a specific task force on corruption.

This is a post-peer-review, pre-copyedit version of an article published in Quality & Quantity. The final authenticated version is available online at: http://dx.doi.org/10.1007/s11135-017-0579-3