Bribery and export intensity: the role of formal institutional constraint susceptibility

In: Cross cultural & strategic management, Volume 30, Issue 2, p. 248-271

Abstract

PurposeBy distinguishing between types of institutional constraints based on their susceptibility to bribery, this study aims to highlight the different mechanisms through which institutions influence bribery and export intensity. This work highlights the susceptibility of institutional constraints as a key consideration in understanding how bribery influences institutions and has implications for export intensity.Design/methodology/approachThis study utilizes firm-level data from World Bank Enterprise Surveys using a fractional logit estimation method.FindingsAn analysis of firm-level data from 26 emerging economies shows support for a positive relationship between permit constraints and firm-level bribery payments. In addition, results provide partial support for a negative relationship between firm-level bribery payments and export intensity. Finally, this study finds partial support for the strengthening impact of financial constraints on the negative relationship between bribery payments and export intensity. However, contrary to our expectations, results indicate that tax rate constraints can weaken the relationship between bribery payments and exports.Originality/valueThis work contributes to international business literature by analyzing how home market institutions influence firms' export intensity. In addition, the study contributes to corruption research by highlighting the importance of heterogeneous susceptibility of formal institutional constraints to bribery. The focus on bribery responds to calls for work on firm misbehavior in international business.