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Why do firms bribe? An empirical study in BRICS economies from 2002 to 2012

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  • Ruohan Wu

Abstract

This article empirically studies why manufacturing firms bribe the government officials. Firm-level data focusing on the five BRICS countries (Brazil, Russia, India, China, and South Africa) was acquired from an Enterprise Survey conducted by the World Bank between 2002 and 2012. The BRICS countries represent typical emerging world economies. We acquired country-level data from multiple sources. We then studied both firm-level and country-level reasons why firms bribe and how much money they spend in bribing. We found that smaller size, slower expansion, and more infrastructural defects significantly increase bribery probability. Bribery also tends to occur more frequently in countries with faster development and more political rigidity. The 2007–2009 financial crisis also encouraged more bribery.

Suggested Citation

  • Ruohan Wu, 2016. "Why do firms bribe? An empirical study in BRICS economies from 2002 to 2012," Economics and Business Letters, Oviedo University Press, vol. 5(3), pages 72-79.
    • Handle: RePEc:ove:journl:aid:11138
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/11138
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    References listed on IDEAS

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    1. Xun Wu, 2009. "Determinants of Bribery in Asian Firms: Evidence from the World Business Environment Survey," Journal of Business Ethics, Springer, vol. 87(1), pages 75-88, June.
    2. Yanjing Chen & Mahmut YaÅŸar & Roderick Rejesus, 2008. "Factors Influencing the Incidence of Bribery Payouts by Firms: A Cross-Country Analysis," Journal of Business Ethics, Springer, vol. 77(2), pages 231-244, January.
    3. Jakob Svensson, 2003. "Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 207-230.
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    7. Yan Leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2012. "How much do firms pay as bribes and what benefits do they get? Evidence from corruption cases worldwide," NBER Working Papers 17981, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Changwatchai, Piyaphan & Dheera-aumpon, Siwapong, 2023. "Culture and bribe giving: Evidence from firm-level data," Research in International Business and Finance, Elsevier, vol. 64(C).

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