Foreign Ownership and Bribery: Agency and Institutional Perspectives

J Yi, Da Teng, Shuang Meng

Research output: Contribution to journalArticlepeer-review

17 Citations (Scopus)
171 Downloads (Pure)


In this study we examine the effectiveness of formal institutions (as the macro-level mechanism) and external auditing (as the micro-level mechanism) in controlling multinational firms’ engagement in bribery. We adopt World Bank’s data and investigate 38,673 firms in 113 countries. Our results suggest that a firm’s engagement in bribery is positively related to its foreign ownership. Furthermore, we demonstrate the substitute effects of formal institutions and external auditing in controlling this unethical activity. We argue that in a situation whereby formal institutions are weak, a firm’s internal governance mechanism plays a vital role in controlling bribery.
Original languageEnglish
Pages (from-to)34-45
Number of pages12
JournalInternational Business Review
Issue number1
Early online date17 May 2017
Publication statusPublished - Feb 2018

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in International Business Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Business Review, 27(1), (2018) DOI:

© 2017, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International


  • Bribery
  • Institutions
  • Auditing
  • Multinational firms


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