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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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  • Søreide, Tina, 2009. "Too risk averse to stay honest?: Business corruption, uncertainty and attitudes toward risk," International Review of Law and Economics, Elsevier, vol. 29(4), pages 388-395, December.
  • Handle: RePEc:eee:irlaec:v:29:y:2009:i:4:p:388-395
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Joël CARIOLLE, 2014. "Corruption in Turbulent Times: a Response to Shocks?," Working Papers P106, FERDI.
    2. Joël CARIOLLE, 2016. "The voracity and scarcity effects of export booms and busts on bribery," Working Papers P146, FERDI.
    3. Gaoussou DIARRA & Sébastien MARCHAND, 2011. "Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries?," Working Papers 201112, CERDI.
    4. Joël CARIOLLE, 2014. "Corruption in Turbulent Times: a Response to Shocks?," Working Papers P106, FERDI.
    5. Bassetti, Thomas & Dal Maso, Lorenzo & Lattanzi, Nicola, 2015. "Family businesses in Eastern European countries: How informal payments affect exports," Journal of Family Business Strategy, Elsevier, vol. 6(4), pages 219-233.

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    Keywords

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

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