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Perception of corruption as a business obstacle, generalized trust and relation centrism in low- and middle-income nations: the moderating influence of governance

Author

Listed:
  • Tolu Olarewaju

    (Keele University)

  • Jagannadha Pawan Tamvada

    (Kingston University)

  • Sharin McDowall-Emefiele

    (University of Birmingham)

  • Raymond Swaray

    (University of Hull)

Abstract

We examine regional differences in how generalized trust and relation centrism influence how 16,785 firms across 20 lower- and middle-income countries perceive corruption as a business obstacle. Using the machine learning method LASSO, our empirical findings indicate that higher out-group generalized trust is associated with increased perceptions of corruption hindering business operations. Conversely, higher in-group friend centrism aligns with reduced perceptions of corruption as an obstacle. Interestingly, regional disparities highlight that family centrism generally outweighs friend centrism in firms' perceptions of corruption obstacles. Furthermore, while legal institutional and regulatory quality partly mitigate this effect, political stability consistently plays the most significant role in weakening this association.

Suggested Citation

  • Tolu Olarewaju & Jagannadha Pawan Tamvada & Sharin McDowall-Emefiele & Raymond Swaray, 2025. "Perception of corruption as a business obstacle, generalized trust and relation centrism in low- and middle-income nations: the moderating influence of governance," Review of Managerial Science, Springer, vol. 19(6), pages 1599-1635, June.
    • Handle: RePEc:spr:rvmgts:v:19:y:2025:i:6:d:10.1007_s11846-024-00802-9
    DOI: 10.1007/s11846-024-00802-9
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    More about this item

    Keywords

    Business; Corruption; Governance; Norms; Social; Values;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • G3 - Financial Economics - - Corporate Finance and Governance
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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