State owned enterprises as bribe payers: the role of institutional environment

Shaheer, Noman, Yi, Jingtao, Li, Sali and Chen, Liang (2017) State owned enterprises as bribe payers: the role of institutional environment. Journal of Business Ethics. ISSN 0167-4544

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Abstract

Our paper draws attention to a neglected channel of corruption – the bribe payments by state-owned enterprises (SOEs). This is an important phenomenon as bribe payments by SOEs fruitlessly waste national resources, compromising public welfare and national prosperity. Using a large dataset of 30,249 firms from 50 countries, we show that, in general, SOEs are less likely to pay bribes for achieving organizational objectives owing to their political connectivity. However, in deteriorated institutional environments, SOEs may be subject to potential managerial rent seeking behaviors, which disproportionately increases SOE bribe propensity relative to privately-owned enterprises (POEs). Specifically, our findings highlight the importance of fostering democracy and rule of law, reducing prevalence of corruption and shortening power distance in reducing the incidence of SOE bribery.

Item Type: Article
Keywords: Agency theory; Bribery; Institutional theory; Managerial rent-seeking; State-owned enterprises
Schools and Departments: School of Business, Management and Economics > Business and Management
Research Centres and Groups: International Business
Depositing User: Liang Chen
Date Deposited: 12 Dec 2017 10:07
Last Modified: 27 Feb 2018 15:23
URI: http://sro.sussex.ac.uk/id/eprint/72002

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