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Too risk averse to stay honest?: Business corruption, uncertainty and attitudes toward risk

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  • Søreide, Tina

Abstract

The presence of business-corruption provokes firms to make choices between legal business approaches and illegal bribery. The outcome of a chosen strategy will usually be uncertain at the time the decision is made, and a firm's decision will depend partly on its attitude towards risk. Drawing on empirical results about business corruption, this paper describes the risks, uncertainties and benefits attached to bribery, and specifies their impact on firms' propensity to offer bribes. It then demonstrates how risk averse firms can be more inclined to offer bribes than risk neutral and risk attracted firms.

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Bibliographic Info

Article provided by Elsevier in its journal International Review of Law and Economics.

Volume (Year): 29 (2009)
Issue (Month): 4 (December)
Pages: 388-395

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Handle: RePEc:eee:irlaec:v:29:y:2009:i:4:p:388-395

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Web page: http://www.elsevier.com/locate/irle

Related research

Keywords: Risk assessment (D8) Legal economic (K) Compliance (K4);

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References

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  16. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages F632-F652, November.
  17. Kenny, Charles, 2006. "Measuring and reducing the impact of corruption in infrastructure," Policy Research Working Paper Series 4099, The World Bank.
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Cited by:
  1. Gaoussou DIARRA & Sébastien MARCHAND, 2011. "Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries?," Working Papers 201112, CERDI.

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