Denial of Corruption: Voluntary Disclosure of Bribery Information
This study explores the rationality behind firms’ decision to admit or deny their involvement in bribery when responding to confidential surveys conducted by international agencies (such as the World Bank). Specifically, we posit that firms’ reluctance to provide accurate information about their engagement in bribery is at least to some extent contingent on certain situational factors. In other words, we claim that this behavior is context dependent. The paper uses the notions provided by the theory of planned behavior to understand the way in which the corruption of the legal environment, the intensity of market competition, and identification risk influence firms’ decision to lie about their involvement in bribery. To test these notions, we use databases from the fifth wave of the EBRD-World Bank Business Environment and Enterprise Performance Survey, country-level data from the Kauffman Foundation and macroeconomic (i.e., country-level) information from the World Bank database. We run ordinary least squares with geographic region-clustered standard errors on data from 30 countries and 6122 individual firms during the period 2012–2013. Consistent with our expectations, the results indicate that firms operating within more corrupt legal environments, facing more competition, and bearing a higher risk of being identified are less likely to deny their involvement in bribery. We conclude that not all firms have the same incentives to lie about their participation in bribery, and therefore, identifying the drivers of this heterogeneity may help policymakers better assess the reliability of bribery information collected through confidential surveys.
KeywordsVoluntary disclosure Bribery Competition Corruption
This study was funded by Spanish Ministry of Economy and Competitiveness (Grant Numbers ECO-2010-22105-C03-03 and ECO2013-45864-P); Community of Madrid (Grant Number S2015/HUM-3417); and FEDER (Grant Number UNC315-EE-3636).
Compliance with Ethical Standards
Conflict of interest
Susana Gago-Rodríguez declares that she has no conflict of interest. Gilberto Márquez-Illescas declares that he has no conflict of interest, and Manuel Núñez-Nickel declares that he has no conflict of interest.
This article does not contain any studies with human participants or animals performed by any of the authors.
- Ajzen, I., & Fishbein, M. (1980). Understanding attitudes and predicting social behavior. Englewood Cliffs: Prentice-Hall,Google Scholar
- Becker, G. S. (1974). Crime and punishment: An economic approach. In G. S. Becker & W. M. Landes (Eds.), Essays in the Economics of Crime and Punishment (pp. 1–54). Cambridge: National Bureau of Economic Research.Google Scholar
- Brzezinsk, M. (2010). That bribe could be costly, The New York Times, November 10.Google Scholar
- Campos, N., Estrin, S., & Proto, E. (2010). Corruption as a Barrier to Entry: Theory and Evidence. IZA Discussion Paper No. 5243.Google Scholar
- Cooter, R., & Ulen, T. (2011). Law and Economics. Boston: Pearson.Google Scholar
- Criminal Division of the U.S. Department of Justice and Enforcement Division of the U.S. Securities and Exchange Commission. (2012). A resource guide to the U.S. foreign corrupt practices act. FCPA Unit: Washington.Google Scholar
- Financial Times (2012). How Wal-Mart used payoffs to get its way in Mexico. By Barstow, D. and A. Xanic. December 17, 2012.Google Scholar
- Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention, and behavior: An introduction to theory and research. Reading: Addison-Wesley.Google Scholar
- Harcourt, B., Becker, G., & Ewald, F. (2013). Becker and Foucault on Crime and Punishment’: A Conversation with Gary Becker, François Ewald, and Bernard Harcourt: The Second Session. Working paper, Chicago.Google Scholar
- Healy, P., Kuppuswamy, V., & Serafeim, G. (2011). What impedes oil and gas companies’ transparency? Working Paper 12-038, Harvard Business School.Google Scholar
- International Monetary Fund (2016). Corruption: costs and mitigation strategies, IMF Staff Discussion Note, May. Retrieved from https://www.imf.org/external/pubs/ ft/sdn/2016/sdn1605.pdf.
- Jain, A. K. (2011). Corruption: Theory, evidence and policy. Munich: CESifo DICE report.Google Scholar
- Organization for Economic Cooperation and Development (2016). Putting an end to corruption, OCDE. Retrieved from https://www.oecd.org/corruption/putting-an-end-to-corruption.pdf.
- Rose-Ackerman, S. (1997). The political economy of corruption, in Corruption and the Global Economy (pp. 31–60). Washington: Institute for International Economics.Google Scholar