Does bribery have a negative impact on firm performance? A firm-level analysis across 132 developing countries

What is it about?

Reflecting the moral view of bribery as a negative phenomenon, bribery has been widely shown to have a deleterious impact at the national level on economic development and growth. The aim of this paper is to evaluate whether it is also the case at the firm-level that bribery has negative impacts on firm performance. Until now, the few studies conducted in individual nations and regions have produced mixed results. Here, therefore, a more comprehensive evaluation of the relationship between bribery and firm performance is undertaken across the developing world.

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Why is it important?

The finding is that bribery enhances firm performance. Firms asserting that it is necessary for enterprises like theirs to give gifts or payments to public officials in order to get things done have 13.9% higher average annual sales growth rates and 48% higher annual productivity growth rates, after controlling for other determinants of firm performance.

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