Winners of Best MA Thesis Award

MA1 Program: Nikita Khokhlov

Thesis: Perceptions of Corruption and Firm Performance in Post-Communist Countries: Institutional Perspective

Supervisor: Anil Duman

Abstract: The thesis investigates the relationship between firm-level perceived corruption, country-level quality of institutional environment, and performance of enterprises in post-communist countries by using the fifth wave of the Business Environment and Enterprise Performance Survey (2012-2014). The theory suggests that corruption can either restrain the firm performance via misallocation of resources and entrepreneurial talent or accelerates it by circumventing the bureaucratic barriers and providing "speed money." The thesis demonstrates that the effect of corruption on micro-economic outcomes at the level of individual enterprises is conditional on the degree to which the rule of law, government effectiveness, and the regulatory quality are strict in the country. The empirical analysis of instrumental variable regression models with the country and economic sector fixed effects shows the positive relationship between perceptions of corruption and labor productivity growth that is statistically mitigated by the quality of the institutional environment. However, a robustness check demonstrates the positive association between perceived corruption and employment growth and a negative association between perceived corruption and sales growth. It means that the results are sensitive to the choice of proxy of firm performance. The study contributes to the literature by revealing that country-level institutional quality statistically matters for the firm-level link between perceptions of corruption and performance of enterprises in post-Communist countries.

MA2/2 Program: Bence HamrakThesis: Persuasion Or Loyalty: The Effects Of Elite Communication On The Electoral Sanctioning Of Corruption - A Survey Experiment in Hungary

Supervisor: Gabor Simonovits

Abstract: This thesis offers a novel approach to the study of co-partisan biases in the electoral sanctioning. Prior research repeatedly showed the moderator role of partisanship on the sanctioning behavior of voters, however, no studies have looked at yet why voters use these biases in the first place. The thesis asks the question whether voters attenuate their sanctioning of co-partisan politicians to answer loyalty-based calls of their partisan identity, or because partisanship offers a channel for persuasion. Exploiting the heterogeneity of elite communication, the study contrasts the limiting effects of simple co-partisan cues to co-partisan elite persuasions on the sanctioning of corruption. The evidence for either alternative - loyalty-based sanctioning or a demand for persuasion - could have important implications for voter behavior and democratic accountability. A vignette-based survey experiment was designed to offer a first test of the hypothesized effects in Hungary in the context of political corruption at the local level. Although the multiple analytical strategies (OLS, 2SLS regression) do not offer clear results because of the unforeseen high rate of non-compliance in the experiment, the exposure of these challenges provide a potentially rewarding methodological and theoretical insight for the future research on the topic.

Congratulations to Nikita and Bence and their supervisors for the exceptional work! Both theses will be available via the CEU Library.