Bribe payments and state ownership: The impact of state ownership on bribery propensity and intensity

Publication Type

Journal Article

Publication Date

5-2023

Abstract

This study examines the degree of state ownership on corporate bribery. Integrating the theories of state ownership and corporate corruption, we propose that state ownership influences bribery propensity and bribery intensity in different ways; it lowers a firm's tendency to pay bribes but increases the relative amount of bribery payment. Building on the control rights/bargaining hypotheses, we demonstrate that state ownership shields firms from bribery demands by reducing administrative hurdles that include bureaucratic requirements of obtaining licenses or settling taxes in business operations. However, state ownership elevates the level of bribes by weakening their capital mobility. Using a sample of 23,018 firms from 54 countries covering 2006 to 2013, we find evidence to support our hypotheses. This article contributes to corruption research by drawing attention to an important channel of corruption and by highlighting the importance of considering not only the propensity but also the intensity of bribe payments.

Keywords

Bribery intensity, bribery propensity, corruption, mechanism testing, state ownership

Discipline

Business | Strategic Management Policy

Research Areas

Strategy and Organisation

Publication

Business and Society

Volume

62

Issue

5

First Page

1103

Last Page

1135

ISSN

0007-6503

Identifier

10.1177/00076503221124860

Publisher

SAGE Publications

Additional URL

https://doi.org/10.1177/00076503221124860

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