IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v101y2025ics1059056025003788.html
   My bibliography  Save this article

Disappearing position-related consumption: Firm bribery and government-firm reciprocity

Author

Listed:
  • Tong, Zefeng
  • Liu, Jia
  • Kong, Dongmin
  • Qi, Yu
  • Zhou, Fei

Abstract

This paper examines the ethical implications of government-firm reciprocity in the absence of election incentives and its impact on firm performance. Using hand-collected data of the position-related consumption of local officials during 2013–2017 in China, we investigate the relationship between this practice and corporate bribery. The results show that the reduction in the budget of position-related consumption leads to an increase in firms’ business entertainment expenses. Firms pay for the personal consumption of local officials through business entertainment expenses, which essentially represents a bribe to local officials. Further analysis indicates that firms bribing local officials receive more government subsidies and preferential tax deductions. However, such reciprocity does not improve firm performance. This study examines the interplay of covert bribery and unethical corporate favoritism, contributing to the business ethics and corruption literature by identifying the relationship between firm venality, government-firm reciprocity, and firm development.

Suggested Citation

  • Tong, Zefeng & Liu, Jia & Kong, Dongmin & Qi, Yu & Zhou, Fei, 2025. "Disappearing position-related consumption: Firm bribery and government-firm reciprocity," International Review of Economics & Finance, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:reveco:v:101:y:2025:i:c:s1059056025003788
    DOI: 10.1016/j.iref.2025.104215
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025003788
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2025.104215?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Position-related consumption; Firm bribery; Government-firm reciprocity; Business ethics; Firm development;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    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:eee:reveco:v:101:y:2025:i:c:s1059056025003788. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    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.