Economic uncertainty and corruption: evidence from public and private firms

Afzali, Mansoor, Ҫolak, Gönül and Fu, Mengchuan (2021) Economic uncertainty and corruption: evidence from public and private firms. Journal of Financial Stability, 57. a100936 1-21. ISSN 1572-3089

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We study the influence of policy uncertainty on the moral behavior of firms. When facing uncertainty, managers perceive various socioeconomic obstacles as more severe and disruptive to their business. Using data from policy uncertainty spouts in 93 countries, we document that some firms engage in norm-deviant behavior by cheating on taxes and paying more bribes. While private firms prefer to cheat on taxes, public firms choose bribery as a favorite tool to “grease the wheels” during periods of uncertainty. Strong social capital (local trust and religiosity) breaks this link between uncertainty and corruption.

Item Type: Article
Schools and Departments: University of Sussex Business School > Accounting and Finance
SWORD Depositor: Mx Elements Account
Depositing User: Mx Elements Account
Date Deposited: 22 Feb 2022 08:26
Last Modified: 23 Feb 2022 08:17

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