What Determines the Return to Bribery? Evidence from Corruption Cases Worldwide

Yan-Leung Cheung, P. Raghavendra Rau, Aris Stouraitis

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


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 languageEnglish
Pages (from-to)6235-6265
Number of pages31
JournalManagement Science
Issue number10
Early online date8 Dec 2020
Publication statusPublished - Oct 2021

Scopus Subject Areas

  • Strategy and Management
  • Management Science and Operations Research

User-Defined Keywords

  • Bribes
  • Corruption
  • Country characteristics
  • Firm performance


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