The Asymmetric Relationship between Corruption, Political Stability and Economic Growth: New Evidence from BRICS Countries

There are studies available that study the influence of corruption on economic growth, but no existing literature studies the asymmetric relationship in context to BRICS countries. In this study, we try to fill the gap in the literature by studying the symmetric and asymmetric association between corruption, political stability and economic growth in BRICS economies where gross fixed capital formation and final consumption expenditure are considered additional variables. Further, we employ panel non-linear autoregressive distributed lag model from 1996–2018. In the long run, the non-linear estimation results confirm an asymmetric relationship while all variables show the asymmetric relationship in the short run. Additionally, the study has employed Dumitrescu–Hurlin (2012)test to find the direction of causality among the variables. The test confirms the causality in particular variables taking economic growth as dependent variable and the decomposed explanatory variables. The article’s findings provide new insight into the relationship between corruption, political stability and economic growth.JEL Codes:D73, F35