Abstract
We analyze a hand-collected sample of bribery cases from around the world to describe how the payment of bribes affects shareholder value. The net present value of a bribe conditional on getting caught is close to zero for the median firm in our sample. However, controlling for industry, country, and firm characteristics, a $1 increase in the size of the bribe is associated with an ex ante $6–$9 increase in the value of the firm, suggesting a correlation between the size of bribes and the size of available benefits. Proxies for information disclosure appear significant in explaining these benefits with more disclosure associated with lower benefits. However, this result is driven by democratic countries where bribe-paying firms receive smaller benefits relative to the bribes they pay. Information disclosure is not significant in autocratic countries.
| Original language | English |
|---|---|
| Pages (from-to) | 6235-6265 |
| Number of pages | 31 |
| Journal | Management Science |
| Volume | 67 |
| Issue number | 10 |
| Early online date | 8 Dec 2020 |
| DOIs | |
| Publication status | Published - Oct 2021 |
Scopus Subject Areas
- Strategy and Management
- Management Science and Operations Research
User-Defined Keywords
- Bribes
- Corruption
- Country characteristics
- Firm performance
