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State-Owned Enterprises as Bribe Payers: The Role of Institutional Environment

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Abstract

Our paper draws attention to a neglected channel of corruption—the bribe payments by state-owned enterprises (SOEs). This is an important phenomenon as bribe payments by SOEs fruitlessly waste national resources, compromising public welfare and national prosperity. Using a large dataset of 30,249 firms from 50 countries, we show that, in general, SOEs are less likely to pay bribes for achieving organizational objectives owing to their political connectivity. However, in deteriorated institutional environments, SOEs may be subjected to potential managerial rent-seeking behaviors, which disproportionately increase SOE bribe propensity relative to privately owned enterprises. Specifically, our findings highlight the importance of fostering democracy and rule of law, reducing prevalence of corruption and shortening power distance in reducing the incidence of SOE bribery.

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Notes

  1. We are grateful to the Section Editor Mary Sully de Luque, as well as an anonymous reviewer, for drawing our attention to these important areas for future research.

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Funding

This study was funded by the National Natural Science Foundation of China (Grant No. 71373010).

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Authors and Affiliations

  1. International Business Department, Darla Moore School of Business, University of South Carolina, Columbia, SC, USA

    Noman Shaheer & Sali Li

  2. School of Business, Renmin University of China, Beijing, China

    Jingtao Yi

  3. University of Sussex, Brighton, BN1 9SL, UK

    Liang Chen

Authors
  1. Noman Shaheer
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  2. Jingtao Yi
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  3. Sali Li
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  4. Liang Chen
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Corresponding author

Correspondence to Jingtao Yi.

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Shaheer, N., Yi, J., Li, S. et al. State-Owned Enterprises as Bribe Payers: The Role of Institutional Environment. J Bus Ethics 159, 221–238 (2019). https://doi.org/10.1007/s10551-017-3768-z

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  • DOI: https://doi.org/10.1007/s10551-017-3768-z

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