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The Bribery Paradox in Transition Economies and the Enactment of ‘New Normal’ Business Environments

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  • Kimberly A. Eddleston
  • Elitsa R. Banalieva
  • Alain Verbeke

Abstract

We develop a novel, sense‐making perspective on corruption in transition economies. Prior research has focused on understanding why some entrepreneurs are more likely to pay bribes than others. It typically assumes that paying bribes will lead to an intended – albeit unfair – competitive advantage. We challenge this assumption and uncover a bribery paradox: drawing upon sense‐making logic, we argue that beyond gaining an immediate benefit from bribing, entrepreneurs who frequently pay bribes may in the longer run be enacting a ‘new normal’ business environment perceived as high in obstacles, especially in transition countries. As sense making is grounded in identity construction and one’s social context, we argue that owners of family firms will be especially vulnerable to the dangers of perceiving greater obstacles over time and enacting an obstacle‐ridden ‘new normal’ business environment. We find empirical support for our framework on a sample of 310 privately held small and medium‐sized enterprises (SMEs) from 22 transition economies.

Suggested Citation

  • Kimberly A. Eddleston & Elitsa R. Banalieva & Alain Verbeke, 2020. "The Bribery Paradox in Transition Economies and the Enactment of ‘New Normal’ Business Environments," Journal of Management Studies, Wiley Blackwell, vol. 57(3), pages 597-625, May.
  • Handle: RePEc:bla:jomstd:v:57:y:2020:i:3:p:597-625
    DOI: 10.1111/joms.12551
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    Cited by:

    1. Nieto, María Jesús & Rodríguez, Alicia & Hernández, Virginia, 2022. "International sourcing and the productivity of SMEs in transition countries: Formal and informal ‘region effects’ and the communist footprint," Journal of Business Research, Elsevier, vol. 145(C), pages 347-359.
    2. 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).
    3. Zhou, Kevin Zheng & Wang, Kui & Xu, Dean & Xie, En, 2022. "Drinking poison to quench thirst: Does bribery foster firm performance in China?," Journal of Business Research, Elsevier, vol. 147(C), pages 505-517.
    4. Grazia D. Santangelo & Alain Verbeke, 2022. "Actionable guidelines to improve ‘theory-related’ contributions to international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(9), pages 1843-1855, December.
    5. Charles E. Stevens & Aloysius Newenham‐Kahindi, 2021. "Avoid, acquiesce … or engage? New insights from sub‐Saharan Africa on MNE strategies for managing corruption," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 273-301, February.
    6. Ethiopia L. Segaro & Kajsa Haag, 2022. "Good Intentions Gone Awry: Government Intervention and Multistakeholder Engagement in a Frontier Market," Journal of Business Ethics, Springer, vol. 180(4), pages 1019-1040, November.
    7. Zhicheng Duan & Tingting Tang, 2022. "Quantitative Simulation and Verification of the Coordination Curves between Sustainable Development and Green Innovation Efficiency: From the Perspective of Urban Agglomerations Development," Sustainability, MDPI, vol. 14(24), pages 1-22, December.

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