IDEAS home Printed from https://ideas.repec.org/a/vrs/seejeb/v17y2022i2p49-66n13.html
   My bibliography  Save this article

Perceptions of Corruption and Informality Among Businesspeople

Author

Listed:
  • Frey Barbara

    (PhD student, Faculty of Business, Economics and Management, Information Systems, University of Regensburg, Universitätsstraße 31, 93053, Regensburg, Germany)

  • Škrinjarić Bruno

    (PhD Research associate, Institute of Economics, Zagreb, Croatia)

  • Budak Jelena

    (PhD, Senior research fellow in permanent position, Institute of Economics, Zagreb, Croatia)

Abstract

This research assesses perception of corruption in business-to-business and business-to-government interactions by using empirical evidence from Serbia. Based on the survey data, it captures the perceptions of corruption of business owners and managers of small and medium enterprises (SMEs) and examines their attitudes towards informal, licit, or illicit, business practices. The typology of SMEs according to their opinion on corruption- and institutional-related obstacles resulted in three different clusters, based on several variables. Moreover, empirical findings show that business is not much hindered by regulations but with a common lack of trust in institutions, crime, and perceived corruption. SMEs are perceived as particularly affected by a negative corrupt environment where large companies are seen as the source of corruption. The findings allow for the creation of lawful and incorruptible business policies, as well as ideas on preventing the common practice of illicit trading with job positions in the public sector.

Suggested Citation

  • Frey Barbara & Škrinjarić Bruno & Budak Jelena, 2022. "Perceptions of Corruption and Informality Among Businesspeople," South East European Journal of Economics and Business, Sciendo, vol. 17(2), pages 49-66, December.
    • Handle: RePEc:vrs:seejeb:v:17:y:2022:i:2:p:49-66:n:13
    DOI: 10.2478/jeb-2022-0014
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/jeb-2022-0014
    Download Restriction: no
    File URL: https://libkey.io/10.2478/jeb-2022-0014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 1-37.
    2. Mihail Arandarenko, 2015. "The Shadow Economy: Challenges to Economic and Social Policy," Contributions to Economics, in: Gorana Krstić & Friedrich Schneider (ed.), Formalizing the Shadow Economy in Serbia, edition 127, chapter 0, pages 5-12, Springer.
    3. Nabamita Dutta & Russell Sobel, 2016. "Does corruption ever help entrepreneurship?," Small Business Economics, Springer, vol. 47(1), pages 179-199, June.
    4. Efendic, Adnan & Ledeneva, Alena, 2020. "The importance of being networked: The costs of informal networking in the Western Balkans region," Economic Systems, Elsevier, vol. 44(4).
    5. Denisova-Schmidt, Elena & Prytula, Yaroslav, 2018. "Business corruption in Ukraine: A way to get things done?," Business Horizons, Elsevier, vol. 61(6), pages 867-879.
    6. Ronald U. Mendoza & Ricardo A. Lim & Anne Ong Lopez, 2015. "Grease or Sand in the Wheels of Commerce? Firm Level Evidence on Corruption and SMES," Journal of International Development, John Wiley & Sons, Ltd., vol. 27(4), pages 415-439, 05-27.
    7. Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2009. "How do institutions affect corruption and the shadow economy?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(6), pages 773-796, December.
    8. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
    9. Sebastian I. Burduja & Rodica Milena Zaharia, 2019. "Romanian Business Leaders’ Perceptions of Business-to-Business Corruption: Leading More Responsible Businesses?," Sustainability, MDPI, vol. 11(20), pages 1-27, October.
    10. Narek Sahakyan & Kyle W. Stiegert, 2012. "Corruption and Firm Performance," Eastern European Economics, Taylor & Francis Journals, vol. 50(6), pages 5-27, November.
    11. Cuervo-Cazurra, Alvaro, 2016. "Corruption in international business," Journal of World Business, Elsevier, vol. 51(1), pages 35-49.
    12. Vartuhí Tonoyan & Robert Strohmeyer & Mohsin Habib & Manfred Perlitz, 2010. "Corruption and Entrepreneurship: How Formal and Informal Institutions Shape Small Firm Behavior in Transition and Mature Market Economies," Entrepreneurship Theory and Practice, , vol. 34(5), pages 803-832, September.
    13. Lambsdorff,Johann Graf, 2007. "The Institutional Economics of Corruption and Reform," Cambridge Books, Cambridge University Press, number 9780521872751.
    14. Bahoo, Salman & Alon, Ilan & Paltrinieri, Andrea, 2020. "Corruption in international business: A review and research agenda," International Business Review, Elsevier, vol. 29(4).
    15. Mr. Vito Tanzi, 1994. "Corruption, Governmental Activities, and Markets," IMF Working Papers 1994/099, International Monetary Fund.
    16. Bernard Chavance, 2008. "Formal and Informal Institutional Change : the Experience of Postsocialist Transformation," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 5(1), pages 57-71, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Efendic Adnan, 2022. "Editorial," South East European Journal of Economics and Business, Sciendo, vol. 17(2), pages 1-1, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lurdes Martins & Jorge Cerdeira & Aurora A.C. Teixeira, 2020. "Does corruption boost or harm firms’ performance in developing and emerging economies? A firm‐level study," The World Economy, Wiley Blackwell, vol. 43(8), pages 2119-2152, August.
    2. Kalyuzhnova, Yelena & Belitski, Maksim, 2019. "The impact of corruption and local content policy in on firm performance: Evidence from Kazakhstan," Resources Policy, Elsevier, vol. 61(C), pages 67-76.
    3. Choudhury, Sanchari, 2023. "Non-random selection into entrepreneurship in the realm of government decentralization and corruption," European Journal of Political Economy, Elsevier, vol. 78(C).
    4. repec:pdn:wpaper:79 is not listed on IDEAS
    5. Ufere, Nnaoke & Gaskin, James & Perelli, Sheri & Somers, Antoinette & Boland, Richard, 2020. "Why is bribery pervasive among firms in sub-Saharan African countries? Multi-industry empirical evidence of organizational isomorphism," Journal of Business Research, Elsevier, vol. 108(C), pages 92-104.
    6. Besnik A. Krasniqi & Sameeksha Desai, 2016. "Institutional drivers of high-growth firms: country-level evidence from 26 transition economies," Small Business Economics, Springer, vol. 47(4), pages 1075-1094, December.
    7. repec:pdn:wpaper:70 is not listed on IDEAS
    8. Colin C. Williams & Abbi M. Kedir, 2016. "The Impacts Of Corruption On Firm Performance: Some Lessons From 40 African Countries," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 1-18, December.
    9. Andres Jauregui & Kirk C. Heriot & David T. Mitchell, 2021. "Corruption and formal-sector entrepreneurship in a middle-income country: spatial analysis of firm births in the Mexican states," Small Business Economics, Springer, vol. 57(4), pages 1957-1972, December.
    10. Axel Dreher & Friedrich Schneider, 2010. "Corruption and the shadow economy: an empirical analysis," Public Choice, Springer, vol. 144(1), pages 215-238, July.
    11. Eugen Dimant & Guglielmo Tosato, 2018. "Causes And Effects Of Corruption: What Has Past Decade'S Empirical Research Taught Us? A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 335-356, April.
    12. Wu, Tao & Delios, Andrew & Chen, Zhaowei & Wang, Xin, 2023. "Rethinking corruption in international business: An empirical review," Journal of World Business, Elsevier, vol. 58(2).
    13. Marcus Box & Karl Gratzer & Xiang Lin, 2023. "Self-employment, corruption, and property rights: a comparative analysis of European and CEE economies," SN Business & Economics, Springer, vol. 3(1), pages 1-29, January.
    14. Abd Rashid, Suliza & Masron, Tajul Ariffin & Malim, Nurhafiza Abdul Kader, 2023. "The effect of corruption on entrepreneurship in the presence of weak regulatory quality: Evidence from developing countries," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).
    15. Lee, Mina & Mutlu, Canan & Lee, Seung-Hyun, 2023. "Bribery and Firm Growth: Sensemaking in CEE and Post-Soviet Countries," Journal of International Management, Elsevier, vol. 29(1).
    16. Yuan Wang, 2022. "Uncertainty, entrepreneurship, and the organization of corruption," Small Business Economics, Springer, vol. 58(1), pages 121-139, January.
    17. Malik, Ashish & Froese, Fabian Jintae, 2022. "Corruption as a perverse Innovation: The dark side of digitalization and corruption in international business," Journal of Business Research, Elsevier, vol. 145(C), pages 682-693.
    18. Rachida Aïssaoui & Frances Fabian, 2022. "Globalization, economic development, and corruption: A cross-lagged contingency perspective," Journal of International Business Policy, Palgrave Macmillan, vol. 5(1), pages 1-28, March.
    19. Axel Dreher & Martin Gassebner, 2013. "Greasing the wheels? The impact of regulations and corruption on firm entry," Public Choice, Springer, vol. 155(3), pages 413-432, June.
    20. Maksim Belitski & Farzana Chowdhury & Sameeksha Desai, 2016. "Taxes, corruption, and entry," Small Business Economics, Springer, vol. 47(1), pages 201-216, June.
    21. Mohamadi, Ashkan & Peltonen, Juhana & Wincent, Joakim, 2017. "Government efficiency and corruption: A country-level study with implications for entrepreneurship," Journal of Business Venturing Insights, Elsevier, vol. 8(C), pages 50-55.

    More about this item

    Keywords

    corruption; informality; SMEs; B2B; B2G; cluster analysis; Serbia;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:seejeb:v:17:y:2022:i:2:p:49-66:n:13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.