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
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
2016
2015
Birhanu, ADDIS GEDEFAW; Gambardella, Alfonso; Valentini, Giovanni
File in questo prodotto:
File Dimensione Formato  
Birhanu_et_al-2015-Strategic_Management_Journal.pdf

non disponibili

Descrizione: Articolo principale
Tipologia: Documento in Post-print (Post-print document)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 269.43 kB
Formato Adobe PDF
269.43 kB Adobe PDF   Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/3984977
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 96
  • ???jsp.display-item.citation.isi??? 91
social impact