Bribery in International Business Transactions

Abstract

Globalization leads to cross-border business transactions between societies with very different norms and regulations regarding bribery. Bribery in international business transactions can be seen as a function of not only the demand for such bribes in different countries, but the supply, or willingness to provide bribes by multinational firms and their representatives. This study addresses the propensity of firms from 30 different countries to engage in international bribery. The study incorporates both domestic (economic development, culture, and domestic corruption in the supplying country) and international factors (those countries\u27 patterns of trade and involvement in international accords) in explaining the willingness to bribe abroad. The propensity to provide bribes was the lowest when corruption was not tolerated in the multinational firms\u27 home countries, when the firms\u27 countries were signatories of the Organization for Economic Cooperation and Development (OECD) anti-bribery convention, and when those countries traded heavily with wealthier nations. Further, these findings are maintained when controlling for levels of economic development and cultural values in the supplying country. In terms of culture, firms from high power distance countries showed a somewhat greater propensity for providing bribes in transactions with less-developed nations

Corporate reporting on corruption: An international comparison

“…and South Asia (69-85%). Contrary to the literature (Baughn, et al, 2010;Cullen, et al, 2004;Husted, 1999;Sanyal, 2005) The clearest link that could be identified with regard to regional-level differences in reporting on anti-corruption was that coverage of these indicators was significantly related to the number of other GRI (non-corruption-related) indicators a company addresses. This relationship was as expected: the more a company reports generally, the more likely it is to report on anti-corruption aspects too.…”

“…A number of studies have shown how countries differ in terms of the amount of corruption they experience (Baughn, Bodie, Buchanan, & Bixby, 2010;Cullen, Parboteeah, & Hoegl, 2004;Husted, 1999;Jain, 2001;Mauro, 1995;Sanyal, 2005;Treisman, 2000). These differences have been linked to differences in countries' economic development (Baughn, et al, 2010;Cullen, et al, 2004;Husted, 1999;Sanyal, 2005), where corruption generally tends to be more widespread in countries with lower income levels (Svensson, 2005;note, however, the critique that there may be a Western bias in defining and measuring corruption, see e.g.…”

“…These differences have been linked to differences in countries' economic development (Baughn, et al, 2010;Cullen, et al, 2004;Husted, 1999;Sanyal, 2005), where corruption generally tends to be more widespread in countries with lower income levels (Svensson, 2005;note, however, the critique that there may be a Western bias in defining and measuring corruption, see e.g. de Maria, 2008).…”

“…Crucially, in democratic societies, voters have the opportunity to vote corrupt politicians out of office (Jain, 2001), while the presence of watchdogs like Transparency International ensures better information flows on corrupt practices (Habib & Zurawicki, 2002). Another key influence on corruption are a society's cultural values and moral code (Baughn, et al, 2010;Cullen, et al, 2004;Sanyal, 2005;Treisman, 2000). For example, three of Hofstede's variables -high uncertainty avoidance, high masculinity, and high power distance -were found to explain high levels of corruption (Husted, 1999).…”

Context, law and reinvestment decisions: Why the transitional periphery differs from other post-state socialist economies

“…However, Spencer & Gomez (2010) reported more mixed results with respect to MNEs from home countries which were signatories to the OECD Convention. Having said that, there is evidence that an MNE's readiness to pay bribes is lowest when such illicit activities are not tolerated in its home country (Baughn, Bodie, Buchanan, & Bixby, 2010).…”