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NOTE: Since 2009 the title of the International Journal of Entrepreneurship Education (IJEE) has been changed to the title above.  ISSN numbers: IJEE 1649-2269 and IRE 2009-2822

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ISSN Number: 2009-2822. Frequency: 4 Issues per year (online only)  

Article #1612 - Is Corruption Control Good for All Businesses? The Role of Cash in the Bribery Game

IRE Vol 17: Issue 4, 2019, Pages 385-428

Author(s): Bach Nguyen (Economics, Finance and Entrepreneurship Department, Aston University, Birmingham, UK)

This study investigates the distributional effects of corruption on the performance of cash-rich and cash-poor firms. We propose that cash-bribes are the ultimate objective of corrupt officials. Therefore, firm-level cash-flow is one of the most important determinants of corrupt decisions. Analysing a 15-year (2006-2015) panel of 2.4 million firm-year observations in Vietnam, we find that cash-rich firms gain less benefit and that their performance may even be harmed when corruption controls improve (less corruption-related harassment). By distinguishing administration corruption from negotiation corruption, we aim to explain this paradox.