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CEO career horizon and corporate bribery: a strategic relationship perspective

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Abstract

We investigate the impact of CEO career horizon on corporate bribery. Based upon the research on time horizon of corporate investments, we argue that bribery may be implemented as an investment in strategic relationships with long-term motivations in emerging markets and, for that matter, CEOs with longer career horizons rather than shorter career horizons are more likely to make bribery investments. Using a sample of 2,914 Chinese listed companies from 2010 to 2018, we find support for the argument. The finding challenges the long-held assumption that short-term oriented CEOs are prone to paying bribes. Further, we augment the research by expounding upon the way that state ownership moderates the relationship between CEO career horizon and firm bribery investment.

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Notes

  1. While the construct of CEO career horizon can be explained by the agency theory, our research does not focus on the conflict of interests between principals and agents as the theory does (Reilly et al., 2016). Rather, our discussion is solely related to different career horizons and risk aversion as well as career concerns of young and old managers. The emphasis is on relationship building that can be determined by decision makers’ attributes associated with time horizon for risk-taking mindsets.

  2. Since the most recently available indices are up to year 2016, we manually calculate the values for year 2017 and 2018 based on the values of year 2016 while considering the growth rate in the last two years. Results stay the same if we restrict the sample to the period from 2010 to 2016.

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Acknowledgements

The authors appreciate encouraging and constructive comments from the Editor and two reviewers of the journal. We also thank Sali Li (University of South Carolina) and Wei Shi (University of Miami) for their helpful comments on the earlier version of the paper. This project was supported by the National Natural Science Foundation of China (Grant Number: 71902032; 72071047; 72171051), UIBE Fund for Excellent Young Scholars (Grant Number: 21YQ04), and UIBE Cultivation Fund (Grant Number: 20PY055-71902032).

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Authors and Affiliations

  1. Business School, University of International Business and Economics, No.10, Huixin Dongjie, Chaoyang District, 100029, Beijing, China

    Jiasi Fan & Zhexiong Tao

  2. Chair of Organization, Human Resources, and Management, University of Mainz, Jakob-Welder-Weg 9, 55099, Mainz, Germany

    Jana Oehmichen

  3. Honorary Professor of Leadership & Governance, University of Groningen, Groningen, The Netherlands

    Jana Oehmichen

  4. Faculty of Economics and Business, University of Groningen, Nettelbosje 2, 9747 AE, Groningen, The Netherlands

    Hans van Ees

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Correspondence to Zhexiong Tao.

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Fan, J., Tao, Z., Oehmichen, J. et al. CEO career horizon and corporate bribery: a strategic relationship perspective. Asia Pac J Manag (2023). https://doi.org/10.1007/s10490-022-09868-z

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