In this paper;;we investigate the effect of corruption on airport productive efficiency. We exploit apanel data of 47 major airports in 27 European countries between 2003 and 2009. We find a strongevidence that corruption has negative impacts on airport operating efficiency. We also test whether theeffects of different ownership forms of airports on productive efficiency are influenced by the level ofcorruption. In the absence of corruption;;majority private-owned airports are found to be more efficientthan majority and/or 100% government-owned airports. However;;majority private-owned airports havelower operating efficiency than majority and/or 100% government-owned corporation airports in acorrupt environment. Apart from GDP per capita;;year and country dummy variables;;we useadditionnal control variables that vary across countries and over years to address potential problems ofomitted variables. Our empirical results are robust despite using three different measures for corruption(International Country Risk Guide (ICRG) Corruption Index;;Corruption Perception Index (CPI) andControl of Corruption Index (CCI) ).
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