Journal of Business Ethics

, Volume 87, Supplement 1, pp 319–332 | Cite as

Corporation as a Crucial Ally Against Corruption

  • Reyes Calderón
  • José Luis Álvarez-Arce
  • Silvia Mayoral


Manuscript type Empirical. Research question/issue This paper aims to contribute to an improved theoretical and empirical understanding of the role that corporation has to play in anticorruption efforts. Research findings/insights Using cross-country data from three databases (Bribe Payers Index, Corruption Perceptions Index, and Doing Business) we found that pro-bribery Investment Climate conditions in host countries are not related to the payments of bribes by multinational companies when these corporations operate abroad. Theoretical/academic implications After describing the conceptual and policy framework that surrounds the discussion on the role played by firms in anticorruption, we present the current debate regarding the effectiveness of international bribery control instruments, with the World Bank-GAC (2006–2008) report as a basis. Both literature and policy seem to be divided into two main, although not mutually exclusive, positions: one demands improvements in Investment Climate conditions from a joint public–private consensus led by international agencies; the other one supports the effectiveness of self-regulation by firms, independent of Investment Climate improvements. The study provides empirical support to the idea that a better Investment Climate is not enough for reducing corruption. Practitioner/policy implications This study offers insights to policy makers interested in promoting the involvement of corporations in the fight against corruption.


Bribe Payers Index corporation corruption Corruption Perceived Index doing business investment climate World Bank Governance and Anticorruption report 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.



We thank Antonio Argandoña, Isabel Rodríguez Tejedo, Prakash Sethi, and especially two anonymous referees for their comments, which have greatly helped to improve the paper; WBG authorities; and Luis Orgaz from the Spanish Ministry of Economy for his hospitality during the 2006 IMF/World Bank Group Annual Meeting and the participation in the WBG-GAC report’s development. We are grateful for the support received from the PIUNA program of the University of Navarra.


  1. Ades, A., Di Tella, R. 1997 The New Economics of Corruption: A Survey and Some New Results. Political Studies, 45(3), 496–515CrossRefGoogle Scholar
  2. Aidt, T. 2003 Economic Analysis of Corruption: A Survey. Economic Journal, 113, 632–652CrossRefGoogle Scholar
  3. Ashforth, B., Anand, V. 2003 The Normalization of Corruption in Organizations. Research in Organizational Behavior, 25, 1–52CrossRefGoogle Scholar
  4. Batra G., Kaufmann D., Stone A. 2002, Voices of Firm 2000: Investment Climate and Governance Findings of the World Business Environment Survey. World Bank, WashingtonGoogle Scholar
  5. Baucus, M. S., Baucus, D. 1998, Paying the Piper: An Empirical Examination of Longer-Term Financial Consequences of Illegal Corporate Behavior. The Academy of Management Journal, 40(1), 129–151CrossRefGoogle Scholar
  6. Beck, T., Demirgüç-Kunt, A., Levine, R. 2005, Bank Supervision and Corruption in Leanding. Journal of Monetary Economics, 53(8), 2131–2163CrossRefGoogle Scholar
  7. Beets, S. 2005, Understanding the Demand Side Issues of Corruption. Journal of Business Ethics, 57, 65–81CrossRefGoogle Scholar
  8. Belcher, A. 2002, Corporate Killing as a Corporate Governance Issue. Corporate Governance an International Review, 10(1), 47–54CrossRefGoogle Scholar
  9. Bertok, J. 1999, OECD Targets both the “Supply Side” and “Demand Side” of Corruption. Public Personnel Management, 28(4), 673–687Google Scholar
  10. Béthoux é., Didry, C., Mias, A. 2007 What Codes of Conduct Tell Us: Corporate Social Responsibility and the Nature of the Multinational Corporation. Corporate Governance: An International Review, 15(1), 77–90CrossRefGoogle Scholar
  11. Black, S. E., Strahan, P. E. 2002 Entrepreneurship and Bank Credit Availability. Journal of Finance, 57, 2807–2833CrossRefGoogle Scholar
  12. Bonn, I., Fisher, J. 2005 Corporate Governance and Business Ethics: Insights from the Strategic Planning Experience. Corporate Governance: An International Review, 13(6), 730–738CrossRefGoogle Scholar
  13. Botero, J., Djankov, S., La Porta, R., Lopez-de-Silanes, F., Schleifer, A. 2004 The Regulation of Labour. The Quarterly Journal of Economics, 119(4), 1339–1382CrossRefGoogle Scholar
  14. Cadbury, A. 2000, The Corporate Governance Agenda. Corporate Governance, an International Review, 8(1), 7–15CrossRefGoogle Scholar
  15. Calderón, R. and J. Álvarez: 2007, Corruption, Complexity and Governance, University of Navarra. Available at
  16. Calderón, C., Liu, L. 2003 The Direction of Causality Between Financial Development and Economic Growth. Journal of Development Economics, 72(1), 321–334CrossRefGoogle Scholar
  17. Caselli, F., Morelli, M. 2004 Bad Politicians. Journal of Public Economics, 88(3–4), 759–782CrossRefGoogle Scholar
  18. Coleman, W. D., Perl, A. 1999, Internationalized Policy Environments and Policy Network Analysis. Political Studies, 47, 691–709CrossRefGoogle Scholar
  19. Collins, J., and K. Uhlenbruck: 2004, ‹How Firms Respond to Government Corruption: Insights from India’, Academy of Management Best Paper Proceedings (New Orleans)Google Scholar
  20. Cragg W. 2005, Ethics Codes, Corporations and the Challenge of Globalization. Edward Elgar, LondonGoogle Scholar
  21. Demirguc-Kunt, A., Love, I., Maksimovic, V. 2006, Business Environment and the Incorporation Decision. Journal of Banking and Finance, 30, 2967–2993CrossRefGoogle Scholar
  22. Djankov S., La Porta R., Lopez de Silanes, F., Shleifer, A. 2002, The Regulation of Entry. Quarterly Journal of Economics, 117(1), 1–37CrossRefGoogle Scholar
  23. Dollar, D., Hallward-Driemeier, M., Mengistae, T. 2005 Investment Climate and Firm Performance in Developing Economies. Economic Development and Cultural Change, 54(1), 1–31CrossRefGoogle Scholar
  24. Dollar, D., Levin, V. 2006 The Increasing Selectivity of Foreign Aid, 1984–2003. World Development, 34(12), 2034–2046CrossRefGoogle Scholar
  25. Elkington, J. 2006, Governance for Sustainability. Corporate Governance: An International Review, 14(6), 522–529CrossRefGoogle Scholar
  26. Everett, J., Neu, D., Shiraz, A. 2007 Accounting and the Global Fight Against Corruption. Accounting, Organizations and Society, 32(6), 513–542CrossRefGoogle Scholar
  27. Fisman, R., Svensson, J. 2007, Are Corruption and Taxation Really Harmful to Growth? Firm-Level Evidence. Journal of Development Economics, 83(1), 63–75CrossRefGoogle Scholar
  28. Gjessing, O., Syse, H. 2007 Norwegian Petroleum Wealth and Universal Ownership. Corporate Governance: An International Review, 15(3), 427–437CrossRefGoogle Scholar
  29. Hopkin, J., Rodríguez-Pose, A. 2007 “Grabbing Hand” or “Helping Hand”?: Corruption and the Economic Role of the State. Governance, 20(2), 187–208CrossRefGoogle Scholar
  30. Howlett, M., Rayner, J. 2006 Globalization and Governance Capacity. Governance, 19(2), 251–275CrossRefGoogle Scholar
  31. Huang, H., Wei, S.-J. 2006, Monetary Policies for Developing Countries: The Role of Institutional Quality. Journal of International Economics, 10(1), 239–252CrossRefGoogle Scholar
  32. Husted, B. 1999, Wealth, Culture, and Corruption. Journal of International Business Studies, 30(2), 339–359CrossRefGoogle Scholar
  33. Jain, A. K. 2001, Corruption. A Review. Journal of Economic Surveys, 15(1), 71–121CrossRefGoogle Scholar
  34. Jordan, A., Wurzel, R., Zito, A. 2006 The Rise of “New” Policy Instruments. Political Studies, 53, 477–496Google Scholar
  35. Klapper, L., Laeven, L., Rajan, R. 2006 Entry Regulation as a Barrier to Entrepreneurship. Journal of Financial Economics, 82, 591–629CrossRefGoogle Scholar
  36. Koh, H. C., Boo, E. 2001, The Link Between Organizational Ethics and Job Satisfaction: A Study of Managers in Singapore. Journal of Business Ethics, 29, 309–324CrossRefGoogle Scholar
  37. Lee, S.-H., Peng, M., Barney, J. 2007, Bankruptcy Law and Entrepreneurship Development: A Real Option Perspective. Academy of Management Review, 32(1), 257–272CrossRefGoogle Scholar
  38. MacMurray W. 2006, Private Sector Response to the Emerging Anti-Corruption Movement. In S. Puri (Ed.) Development Outreach. World Bank, WashingtonGoogle Scholar
  39. Mauro, P. 1995, Corruption and Growth. Quarterly Journal of Economics, 110(3), 681–712CrossRefGoogle Scholar
  40. Mungui-Pippidi, A. 2006, Corruption: Diagnosis and Treatment. Journal of Democracy, 17(3), 86–99CrossRefGoogle Scholar
  41. Nwabuzor, A. 2005, Corruption and Development: New Initiatives in Economic Openness and Strengthened Rule of Law. Journal of Business Ethics, 59, 121–138CrossRefGoogle Scholar
  42. OECD: 1997, Convention on Combating Bribery of Foreign Public. Working Group on Bribery in International Business Transactions (CIME) (OECD, Paris)Google Scholar
  43. O’Higgins, E. 2006, Corruption, Underdevelopment, and Extractive Industries: Addressing the Vicious Cycle. Business Ethics Quarterly, 16(2), 235–254Google Scholar
  44. Pantzalis, C., J. Park and N. Sutton: 2008, ‹Corruption and Valuation of Multinational Corporations’, Journal of Empirical Finance 15(3), 387–417Google Scholar
  45. Peng, D. and C. Bajona: 2008, ‹China’s Vulnerability to Current Crisis’, China Economic Review 19(2), 138–151Google Scholar
  46. Posner, R. A.: 1998, ‹On Creating a Legal Framework for Economic Development’, The World Bank Research Observer 13(1), 1–12Google Scholar
  47. Potts, S. D., Matuszewski, I. L. 2004, Ethics and Corporate Governance. Corporate Governance: An International Review, 12(2), 177–179CrossRefGoogle Scholar
  48. Rose-Ackerman, S. (1999) Corruption and Government: Causes, Consequences, and Reform. Cambridge University Press, CambridgeGoogle Scholar
  49. Rose-Ackerman, S. 2002, ‹Grand’ Corruption and the Ethics of Global Business. Journal of Banking and Finance, 26, 1889–1918CrossRefGoogle Scholar
  50. Sampford, C., Shacklock, A., Connors, C., Galtung, F. 2006, Measuring Corruption. Ashgate Publishing Group Aldershot, UKGoogle Scholar
  51. Sanyal, R. 2005, Determinates of Bribery in International Business: The Cultural and Economic Factors. Journal of Business Ethics, 59, 139–145CrossRefGoogle Scholar
  52. Schechter, L. 2007, Theft, Gift-Giving and Trustworthiness. The American Economic Review, 97(5), 1560–1582CrossRefGoogle Scholar
  53. Seligson, M. A. 2006, The Measurement and Impact of Corruption Victimization. World Development, 34(2), 381–404CrossRefGoogle Scholar
  54. SenGupta, R.: 2006, ‹Trouble at Home for Overseas Bribes’, Financial Times, 2nd February 2006Google Scholar
  55. Sethi, S. P. 2005, Voluntary Codes of Conduct for Multinational Corporations. Journal of Business Ethics, 59, 1–2CrossRefGoogle Scholar
  56. Sung, H. 2005, Between Demand and Supply: Bribery in International Trade. Crime, Law, and Social Change, 44, 111–131CrossRefGoogle Scholar
  57. Transparency International: 2004, Global Corruption Barometer 2004 (Berlin, Germany)Google Scholar
  58. Trevino, K. T. 1986, Ethical Decision Making in Organizations: A Person-Situation Interaction Model. Academy of Management Review, 11, 601–617CrossRefGoogle Scholar
  59. United Nations: 2004, The Global Programme Against Corruption. U.N. Anticorruption Toolkit (United Nations Office on Drugs and Crime, New York)Google Scholar
  60. Valentine, S., Greller, M., Richtermeyer, S. B. 2006, Employee Job Response as a Function of Ethical Context and Perceived Organization Support. Journal of Business Research, 59(5), 582–588CrossRefGoogle Scholar
  61. Veron, R., Williams, G., Corbridge, S., Srisvastava, M. 2006, Corruption Decentralization? Community Monitoring of Poverty-Alleviation Schemes in Eastern India. World Development, 34(11), 1922–1941CrossRefGoogle Scholar
  62. Vincke, F., & Heimann F. 2003 Fighting Corruption. A Corporate Practices Manual. International Chamber of Commerce, ParisGoogle Scholar
  63. Vogl, F. 1998 The Supply Side of Global Bribery. Finance and Development, 35(2), 30–33Google Scholar
  64. Waddock, S., Bodwell C., Graves S. G. 2002, Responsibility: The New Business Imperative. Academy of Management Executive, 16(2), 132–148Google Scholar
  65. Williamson, O. 1975, Markets and Hierarchies, Analysis and Antitrust Implications: A Study in the Economics of Internal Organization. Free Press, New YorkGoogle Scholar
  66. World Bank: 2007, Doing Business 2007 (IBRD and WB, Washington)Google Scholar
  67. World Bank Group 2006-8, Strengthening Bank Group Engagement on Governance and Anticorruption, DC2006-0017Google Scholar
  68. Wu, S. J. 2006, Corruption and Cross-Border Investment by Multinational Firms. Journal of Comparative Economics, 34(4), 839–856CrossRefGoogle Scholar
  69. You, J., Khagram, S. 2005, A Comparative Study of Inequality and Corruption. American Journal of Sociology, 70(1), 136–157CrossRefGoogle Scholar
  70. Zhang, Z. 2007, Legal Deterrence: The Foundation of Corporate Governance Evidence from China. Corporate Governance: An International Review, 15(5), 741–767CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2008

Authors and Affiliations

  • Reyes Calderón
    • 1
  • José Luis Álvarez-Arce
    • 1
  • Silvia Mayoral
    • 1
  1. 1.School of Economics and Business AdministrationUniversity of NavarraPamplonaSpain

Personalised recommendations