Effect of Corruption on Access to finance for market pioneering in Nigeria: Evidence from Knowledge- Intensive Businesses

Abstract

Finance is very crucial for the innovativeness of firms especially in pioneering new markets. Finance can be obtained from the formal and informal financial institutions. However, there is a growing concern about the prevalence of bribery and corruption as a menace in most developing economies especially in acquisition of debt finances for businesses. Hence, this study investigates the effect of bribery and corruption on access to finance for new market pioneering by Knowledge-Intensive Businesses (KIBs) SMEs in Nigeria. The quantitative approach was employed using survey. A census-based method was employed for the sample size of 510 KIBs SMEs at Lagos. A self-administered questionnaire was employed for data collection and descriptive statistics, Pearson-moment correlation coefficient and multiple linear regression were used for the analysis. The result indicated that bribery and corruption has a negative impact on KIBs owners/managers ability to acquire finance from the institutions. The study recommends that policy makers should backup the pioneering innovations with policies that can protect KIBs owners in obtaining debt-finances without being pressurised to give bribe. Also, the new government anti-corruption campaign should not be limited to the politician but to include everybody in every facet of the economy, whether private or public sector. This study will contribute to the body of empirical study in entrepreneurial finance and innovation in developing economies.