Foreign Ownership and Bribery: Agency and Institutional Perspectives

J Yi; Da Teng; Shuang  Meng

doi:10.1016/j.ibusrev.2017.05.001

Foreign Ownership and Bribery: Agency and Institutional Perspectives

J Yi, Da Teng, Shuang Meng

Renmin University

Research output: Contribution to journal › Article › peer-review

26 Citations (Scopus)

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Abstract

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 language	English
Pages (from-to)	34-45
Number of pages	12
Journal	International Business Review
Volume	27
Issue number	1
Early online date	17 May 2017
DOIs	https://doi.org/10.1016/j.ibusrev.2017.05.001
Publication status	Published - 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:
10.1016/j.ibusrev.2017.05.001

© 2017, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

Bribery
Institutions
Auditing
Multinational firms

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10.1016/j.ibusrev.2017.05.001

Post-PrintAccepted author manuscript, 1.17 MBLicence: CC BY-NC-ND

Cite this

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title = "Foreign Ownership and Bribery: Agency and Institutional Perspectives",

abstract = "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{\textquoteright} engagement in bribery. We adopt World Bank{\textquoteright}s data and investigate 38,673 firms in 113 countries. Our results suggest that a firm{\textquoteright}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{\textquoteright}s internal governance mechanism plays a vital role in controlling bribery. ",

keywords = "Bribery, Institutions, Auditing, Multinational firms",

author = "J Yi and Da Teng and Shuang Meng",

note = "NOTICE: this is the author{\textquoteright}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: 10.1016/j.ibusrev.2017.05.001 {\textcopyright} 2017, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/ ",

year = "2018",

month = feb,

doi = "10.1016/j.ibusrev.2017.05.001",

language = "English",

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N1 - 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: 10.1016/j.ibusrev.2017.05.001 © 2017, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

PY - 2018/2

Y1 - 2018/2

N2 - 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.

AB - 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.

KW - Bribery

KW - Institutions

KW - Auditing

KW - Multinational firms

UR - http://www.sciencedirect.com/science/article/pii/S0969593116302232

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SN - 0969-5931

VL - 27

SP - 34

EP - 45

JO - International Business Review

JF - International Business Review

IS - 1

ER -

Foreign Ownership and Bribery: Agency and Institutional Perspectives

Abstract

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Keywords

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