Does bribery in the home country promote or dampen firm exports?
Version of Record online: 28 MAR 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 34, Issue 12, pages 1472–1487, December 2013
How to Cite
Lee, S.-H. and Weng, D. H. (2013), Does bribery in the home country promote or dampen firm exports?. Strat. Mgmt. J., 34: 1472–1487. doi: 10.1002/smj.2075
- Issue online: 21 OCT 2013
- Version of Record online: 28 MAR 2013
- Accepted manuscript online: 29 JAN 2013 11:13AM EST
- Manuscript Accepted: 8 JUL 2012
- Manuscript Revised: 4 JUL 2012
- Manuscript Received: 4 NOV 2010
- City University of Hong Kong. Grant Number: 7200268
- government corruption;
- transition economy
This study examines the impact of bribery within the home country on firm exports by developing two contrasting hypotheses. On the one hand, preferential treatment resulting from government officials in exchange for bribes may promote exports by enhancing efficiency and enabling bribing firms to better compete in foreign markets. On the other hand, preferential treatment resulting from bribes may decrease exports by providing firms with more established positions within the domestic market diminishing the incentive to explore foreign markets. Adopting the three-stage least squares method, we test these competing arguments using a sample of firms operating within transition economies. We find that bribery within the home country decreases rather than increases firm exports. The implications of our findings are discussed. Copyright © 2013 John Wiley & Sons, Ltd.