Regulatory bark and legal bite: how corruption and country institutional environments influence international logistics performance

Abstract

PurposeThis research uses theoretical perspectives from public choice and public policy to establish and test theory of the combined effects of institutional environments and bureaucratic corruption on international delivery performance.Design/methodology/approachA panel archival dataset is assembled from multiple public databases to test hypotheses based on public policy, public choice and supply chain theory using a fixed effects model.FindingsThe authors' theory demonstrates that institutional environments as constituted by the level of regulatory trade barriers and legal system effectiveness combined with bureaucratic corruption can influence the timeliness of international deliveries.Research limitations/implicationsThis research extends public choice and public policy with the insight that regulatory institutions' bark is not bad without the bite of effective legal institutions. The research uses archival data collected in mass surveys with data aggregated at the country level that can be unduly affected by selection effects, perceptual data, and unobserved underlying mechanisms.Practical implicationsThe results of this research can be used to inform supply chain managers working in trade compliance to be aware of the costs and effects on logistics performance that result from encountering different institutional environments and the concomitant corruption.Originality/valueThis is the first investigation of the complex and significant interaction effects of institutional environments and corruption on international delivery performance.