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

Abstract

This article empirically studies why manufacturing firms bribe the government officials. Firmlevel 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 bribery.