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Social networks and bribery: The case of entrepreneurs in Eastern Europe

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  • Chavis, Larry

Abstract

Using a survey of new firms in Poland, Romania, and Slovakia, I explore how an entrepreneur’s social networks affect the amount paid in bribes to government officials. Lower levels of bribe payments are associated with ownership by a former manager of a state-owned enterprise (SOE), with being a spin-off from a SOE, and with trade association membership. The results also suggest that these networks have a larger impact on bribe payments than do firm characteristics such as profits, sales, or resale value. For the average firm, having a former SOE manager as an owner can be expected to reduce bribe payments by over 50%, while, by contrast, doubling the firm’s profits results in only a 7% increase in bribe payments.

Suggested Citation

  • Chavis, Larry, 2013. "Social networks and bribery: The case of entrepreneurs in Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 279-293.
    • Handle: RePEc:eee:jcecon:v:41:y:2013:i:1:p:279-293
    DOI: 10.1016/j.jce.2012.11.002
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    Cited by:

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    2. Chomsorn Tangdenchai & Asda Chintakananda & George O. White, 2023. "Active and passive bribery’s impact on firm relational embeddedness: evidence from Thailand," Asian Business & Management, Palgrave Macmillan, vol. 22(4), pages 1773-1799, September.
    3. Andrzej Cieślik & Łukasz Goczek, 2022. "Who suffers and how much from corruption? Evidence from firm-level data," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(3), pages 451-473, September.
    4. Xiaoyu Wu & Jianmei Zhao, 2020. "Risk sharing, siblings, and household equity investment: evidence from urban China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 461-482, April.
    5. Koveshnikov, Alexei & Dabija, Dan-Cristian & Inkpen, Andrew & Vătămănescu, Elena-Mădălina, 2022. "Not running out of steam after 30 years: The enduring relevance of Central and Eastern Europe for international management scholarship," Journal of International Management, Elsevier, vol. 28(3).
    6. Kee Hoon Chung & Hyeok Yong Kwon, 2021. "Trust and the protection of property rights: evidence from global regions," Public Choice, Springer, vol. 189(3), pages 493-513, December.
    7. Andrzej Cieślik & Łukasz Goczek, 2015. "Percepcja korupcji na poziomie przedsiębiorstw w krajach postkomunistycznych," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 55-77.
    8. Yujin Jeong & Jordan I. Siegel, 2018. "Threat of falling high status and corporate bribery: Evidence from the revealed accounting records of two South Korean presidents," Strategic Management Journal, Wiley Blackwell, vol. 39(4), pages 1083-1111, April.
    9. Zhang, Dongyang & Guo, Yumei, 2019. "Financing R&D in Chinese private firms: Business associations or political connection?," Economic Modelling, Elsevier, vol. 79(C), pages 247-261.
    10. Michael Wyrwich, 2020. "The value orientation of entrepreneurs in challenging institutional contexts: Insights from a unique historical episode," Jena Economics Research Papers 2020-001, Friedrich-Schiller-University Jena.

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    More about this item

    Keywords

    Corruption; Transition economies; Social networks; Property rights;
    All these keywords.

    JEL classification:

    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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