Corruption and sustainable development: The impact on income shifting in European international groups

Abstract

Corruption is a proxy of low detection of opportunistic behavior and may influence managers' decisions. Considering an international scenario, the study investigates whether income shifting between subsidiaries and parents is emphasized for subsidiaries in less corrupted countries. Data refer to groups with the parent company in France, German, Italy, Spain, or UK. Using financial data, tax rate, and country corruption level, linear regression is carried out to determine the impact of corruption on income shifting process. Using anomie theory, this study offers additional evidence that corruption is a symptom of instability and influences managers' decision‐making processes. Managers tend to shift income towards less corrupted countries and so, high bribery reduces the incentive to attract foreign income. These results are novel given we focus on European international groups and not merely on single firms. They confirm the positive effects of responsible business and the attractiveness of countries that control for corruption.

UN sustainable development goals, good governance, and corruption: The paradox of the world's poorest economies

“…These results once again corroborate the lack of capacity/will of governments of these developing countries to curtail widespread corruption. Also, the trends in CPI corroborate our assumption stated that the UN SDGs remain beyond reach for the world's poorest economies and is supported by several studies (Akhbari & Nejati, 2019; Marchini et al, 2019; Muma, 2018; Sinha et al, 2019; Smith, 2010; Venard, 2013).…”

“…While the results of the panels regression model (fixed effect model) seem to be interesting, the trends in the institutional conditions of these 10 countries selected for this paper show that they are will not be able to achieve the SDGs by 2030 and beyond unless there is a strong political will to curb the legacy of corruption and other social artifacts that impede their development. Consistent with our statement, van Zanten and van Tulder (2020) contend that “the world is not on track to achieve the 17 SDGs by 2030.” Taking globally, the legacy of corruption is a symptom of instability that influences decision‐making processes (Marchini et al, 2019) thus presenting a barrier to sustainability.…”

Mitigating bribery risks to strengthen the corporate social responsibility in accordance with the ISO 37001

“…Many authors (Andersson, ; Bager, ; Chen, Xie, You, & Zhang, ; Cover & Mustafa, ; Heywood & Meyer‐Sahling, ; Kotchegura, ; Krasovec, Johannsen, Pedersen, & Deželan, ; Marchini et al, ; Matic, ; Rimšaitė, ; Witten, Parker, Holtmeier, & Koffer, ; Zoogah, ) have focused their research on exploring this societal problem in public sector organizations. However, this phenomenon affects the activities of all enterprises in society (Álvarez Etxeberria & Aldaz Odriozola, ; Amor‐Esteban, Galindo‐Villardón, García‐Sánchez, & David, ; Bellaubi & Boehm, ; Brenton‐Rule, Barbieri, & Lester, ; Dos Santos, Guevara, Amorim, & Ferraz‐Neto, ; Giang, Xuan, & Hai, ; Krishnamurti, Shams, & Velayutham, ; Lin & Chuang, ; Shapiro, ; Soreide, ; Witten et al, ).…”

“…One such problem that businesses face today is bribery. As organizations continue to expand worldwide into emerging markets, the risk of bribery has increased significantly, and not all countries assign enough attention to this problem (Fifka & Berg, ; Kuehl, ; López‐González & Martínez‐Ferrero, ; Marchini, Mazza, & Medioli, ; Tomasic, ; Van Genugten, ). This is due to the fact that this approach often helps organizations achieve significant business deals quickly and without much effort.…”

Method of forming strategic alternatives for the development of subsidiaries and choosing the optimal strategy for each of them

“…Однако следует иметь в виду, что большинство процессов и явлений в конкурентной среде не поддаются непосредственному измерению и получить их количественные или порядковые оценки можно только методами экспертной диагностики, конечной целью которой является возможность экспертного прогнозирования полученных дочерним предприятием дополнительных конкурентных преимуществ [9,[10][11][12].…”