Is Corruption Control Good for All Businesses? The Role of Cash in the Bribery Game

Abstract

This study investigates the distributional effects of corruption on the performance of cash-rich and cash-poor firms. We propose that cash-bribes are the ultimate objective of corrupt officials. Therefore, firm-level cash-flow is one of the most important determinants of corrupt decisions. Analysing a 15-year (2006-2015) panel of 2.4 million firm-year observations in Vietnam, we find that cash-rich firms gain less benefit and that their performance may even be harmed when corruption controls improve (less corruption-related harassment). By distinguishing administration corruption from negotiation corruption, we aim to explain this paradox.

Divisions: Aston Business School > Economics, Finance & Entrepreneurship
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Related URLs: https://www.sen ... hip?article=642 (Publisher URL)
PURE Output Type: Article
Published Date: 2020-04-01
Accepted Date: 2020-01-21
Authors: Nguyen, Bach (ORCID Profile 0000-0003-1527-7443)

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