Using a unique database that measures firm-level bribery in Africa and Latin America, we corroborate extant results in the literature that paying bribes deters firm investments in fixed assets. Our contribution is to explore four mechanisms. By adopting a reverse causality approach (Gelman and Imbens, 2013), we find evidence consistent with one of them: short-term oriented firms prefer to bribe rather than invest in fixed assets, while the opposite is true for firms with a long-term orientation. We rule out that bribe payments drain financial resources for investment, that firms that invest do not bribe because fixed assets make them less flexible and more vulnerable to future bribes, and that less efficient firms bribe rather than invest

Bribery and investment: firm-level evidence from Africa and Latin America / Birhanu, ADDIS GEDEFAW; Gambardella, Alfonso; Valentini, Giovanni. - In: STRATEGIC MANAGEMENT JOURNAL. - ISSN 0143-2095. - 37:9(2016), pp. 1865-1877. [10.1002/smj.2431]

Bribery and investment: firm-level evidence from Africa and Latin America

VALENTINI, GIOVANNI
2016

Abstract

Using a unique database that measures firm-level bribery in Africa and Latin America, we corroborate extant results in the literature that paying bribes deters firm investments in fixed assets. Our contribution is to explore four mechanisms. By adopting a reverse causality approach (Gelman and Imbens, 2013), we find evidence consistent with one of them: short-term oriented firms prefer to bribe rather than invest in fixed assets, while the opposite is true for firms with a long-term orientation. We rule out that bribe payments drain financial resources for investment, that firms that invest do not bribe because fixed assets make them less flexible and more vulnerable to future bribes, and that less efficient firms bribe rather than invest
Bribes, corruption, influence strategy, investments, emerging economies
Bribery and investment: firm-level evidence from Africa and Latin America / Birhanu, ADDIS GEDEFAW; Gambardella, Alfonso; Valentini, Giovanni. - In: STRATEGIC MANAGEMENT JOURNAL. - ISSN 0143-2095. - 37:9(2016), pp. 1865-1877. [10.1002/smj.2431]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/221630
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