Bribery and its Firm-Level Outcomes in Africa and Latin America

The Impact of Personal Relationships on Bribery Incidence in Transition Economies

“…Furthermore, the state officials' attitudes toward the private sector vary greatly (CIEM, ; VNCI‐VCCI, ). Attitudes towards entrepreneurship are important because they demonstrate whether a society accepts or tolerates entrepreneurship, which in turn affects entrepreneurial response (Welter and Smallbone, ; Birhanu et al ., ). For example, the four main state‐owned banks account for approximately 80% of total Vietnamese bank assets and prefer to support state‐owned enterprises rather than entrepreneurs, who often have insufficient reputational capital and are therefore considered high‐risk borrowers (Masina, ).…”

“…Thus, bribery is a bilateral event that involves a person from the public sector (a bribe receiver) and a person from the private sector (a bribe payer) (Treisman, ; Cuervo‐Cazurra, ; Birhanu et al ., ). This paper focuses on the bribe payer; that is, entrepreneurs (in a transition economy), who are the unit of analysis (Aidis and van Praag, ).…”

“…In recent work on firm‐level bribery it has been shown that firm characteristics (e.g., size, age, profit and ownership structure) and the business environment (e.g., the quality of government service, the quality of the legal environment, competition, regulatory burden) influence a decision to bribe (Svensson, ; Clarke and Xu, ; Gaviria, ; Martin et al ., ; Chen et al ., ; Wu, ; De Jong et al ., ; Birhanu et al ., ). This finding has interesting implications for the literature on corruption.…”