Greasing, rent-seeking bribes and firm growth: evidence from garment and textile firms in Vietnam

Nguyen, Thang V.; Le, Ngoc Tan; Dinh, Ha L. H.; Pham, Hường

doi:10.1007/s10611-020-09893-3

Cited by 17 publications

(13 citation statements)

References 44 publications

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“…The study shows that the use of internal control and codes of conduct is not only important for firms in developed countries (Agbejule and Jokipii, 2009;Chalmers et al, 2019;L€ ansiluoto et al, 2016;Lawson et al, 2017;O'leary et al, 2006) but also in emerging economies. While the lack of market-supporting institutions may induce motivation, opportunities and rationalization for fraud commission (Khan, 2006;Nguyen et al, 2020;Puffer et al, 2010;Smallbone et al, 2014), firms in emerging economies could mitigate these risks by proactively applying internal systems and codes of conduct. When they do so, they are less likely to violate the laws and to pay bribes to public officials.…”

Section: Discussionmentioning

confidence: 99%

“…Vietnam is a highly relevant context for studying this topic since most firms in Vietnam are young and their applications of internal control have been promoted only recently (Ngo, 2004;Nguyen, 2017;Vu, 2016). Also, the country suffers from a high level of corruption (Nguyen et al, 2020;TI, 2019;Tromme, 2016;WB, 2012). Similar to firms in other developing countries, those in Vietnam pay bribes frequently, yet it is not clear how they can participate in the anti-bribery effort more effectively (Nguyen et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

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The use of internal control systems and codes of conduct as anti-corruption practices: evidence from Vietnamese firms

Nguyen

2020

BJM

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PurposeDrawing from fraud triangle theory, the purpose of this paper is to examine whether the use of internal control systems and codes of conduct, as a specific element of internal control, helps firms to reduce law violations and bribery payments to public officials.Design/methodology/approachThe study is based on survey data of Vietnamese firms, conducted between September and December 2018. The authors run logistic and ordinary least squares regressions to test the hypotheses.FindingsThe study showed that the use of internal control systems has a negative and significant relationship with law violation but not with bribes paid to public officials. By contrast, the use of codes of conduct appears to reduce bribe payments but not law violations.Research limitations/implicationsCross-sectional data do not allow us to confirm causal relationships. The self-reported measures of the use of codes of conduct and internal control systems may suffer from social desirability biases and should be further validated with different samples of firms. Finally, the relatively modest number of firms that participated in the survey raises a concern of sample representativeness.Practical implicationsFor businesses, the application of codes of conduct and internal control systems enhances the reliability and certainty of the firm's operations as well as its integrity, contributing to the firm's long-term development. For policymakers, encouraging businesses to use internal control systems and codes of conduct would contribute meaningfully to the anti-corruption effort.Originality/valueBusinesses in emerging economies face a dilemma of how to participate in an anti-corruption agenda while staying profitable. This study shows that the use of internal control systems and codes of conduct would serve both purposes, contributing to businesses' sustainable development.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The use of internal control systems and codes of conduct as anti-corruption practices: evidence from Vietnamese firms

Nguyen

2020

BJM

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“…By contrast, the immature state of formal institutions in DETEs results in two major consequences. First, the unclear and unstable laws, regulations, and rules are fertile grounds for bureaucracy, administrative barriers, corruption, and bribery (Nguyen et al, 2016(Nguyen et al, , 2020b. Second, because formal constraints often fail, entrepreneurs have to rely more on social capital embedded in personal ties (i.e.…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

“…In the context where corruption is so common, bribery can be considered as social norms and expectation that imposes coercive isomorphism on entrepreneurs. Firms in Vietnam often have to adhere to bribery practices for greasing and/or rent-seeking, as well as to gain legitimacy regardless of their ownership and origin (Gillespie et al, 2020;Nguyen et al, 2016Nguyen et al, , 2020bVuong Binh et al, 2020). This informal norm can also shape SMEs' behaviour through mimetic isomorphism because firms could imitate others, especially those who successfully access resources by paying "informal charges" to state agencies and bank officials.…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

Bank ties, institutional pressures, and capital structure of Vietnamese SMEs

Ngo

Nguyen

Roy

2022

IJEBR

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PurposeThis article studies the moderating effect of institutional pressures on the impact of bank ties on the capital structure of small and medium-size enterprises (SMEs).Design/methodology/approachThe study uses an unbalanced longitudinal dataset covering three years—2011, 2013 and 2015—from a project on small manufacturing enterprises in Vietnam. The sample consists of 7,680 firm-year observations.FindingsPressures from formal and informal institutions lessen the positive effect of bank ties on the capital structure of SMEs. These moderating effects are more salient in regions having lower institutional quality.Originality/valueEmpirically showing how institutional factors can be investigated together with relational factors to explain the capital structure of SMEs in a developing economy. Distinguishing between formal and informal institutional pressures and revealing their indirect effect on SMEs' capital structure through impacting the effect of bank ties.

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“…A country’s corruption positively triggers rent-seeking behaviour (Barr and Serra, 2010; Debacker et al , 2015). A recent study has found a positive impact of rent-seeking bribes on the growth of public firms (Nguyen et al , 2020). In the Indian context, we have seen many respondents state that their organisations believed in “rent-seeking bribes”; at the same time, most of them echoed government official triggers for this behaviour.…”

Section: Challenges In Displaying Ethical Conductmentioning

confidence: 99%

Who cares about ethical practices at workplace? A taxonomy of employees’ unethical conduct from top management perspective

Jha¹,

Singh²

2021

IJOA

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Purpose The purpose of the study is to explore the various kind of prevailing unethical practices at workplace along with identification of factors triggering such unethical practices. Growing incidences of indulgence of employees in unethical acts in various organisation and negative consequences associated with it for the organisation such as erosion of reputation because of advance digital media coverage, shareholder value and others made compulsive to study the root cause of unethical behaviour at the workplace. Design/methodology/approach This study extracts meaning from the experiences of top managers working in nine Indian organisations to understand the challenges faced by individuals at the workplace using the Gioia methodology. A total of 33 top management team (TMT) members were interviewed in detail to capture their experience in regard to various challenges that impose a threat to ethical conduct in the organisation. Findings The authors identified four categories of unethical behaviour, namely, pro-self, lack of autonomy, pro-organisation, systemic and negligence. Further, the authors have developed a taxonomy suggesting strategies to control unethical conduct at the workplace. Besides, the current study unravels the triggers behind different categories of unethical conduct, such as bottom-line mentality, rent-seeking behaviour of government officials, fluid ethical study culture and others. Originality/value Various types of unethical behaviour have been identified and frameworks to address such unethical practices are suggested in the paper. TMTs views have been captured to understand the root cause of unethical practices and strategies for addressing them have been discussed in the paper.

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Greasing, rent-seeking bribes and firm growth: evidence from garment and textile firms in Vietnam

Cited by 17 publications

References 44 publications

The use of internal control systems and codes of conduct as anti-corruption practices: evidence from Vietnamese firms

The use of internal control systems and codes of conduct as anti-corruption practices: evidence from Vietnamese firms

Bank ties, institutional pressures, and capital structure of Vietnamese SMEs

Who cares about ethical practices at workplace? A taxonomy of employees’ unethical conduct from top management perspective

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