publication . Book . Preprint . 2013

Corruption and firm behavior

Sandra Sequeira; Simeon Djankov;
Open Access English
  • Published: 01 Feb 2013
  • Publisher: The London School of Economics and Political Science
  • Country: United Kingdom
This paper investigates how corruption affects firrm behavior. Firms can engage in two types of corruption when seeking a public service: cost-reducing "collusive" corruption and cost increasing "coercive" corruption. Using an original and unusually rich dataset on bribe payments at ports matched to firrm-level data, we observe how firms respond to each type of corruption by adjusting their shipping and sourcing strategies. "Collusive" corruption is associated with higher usage of the corrupt port, while "coercive" corruption is associated with reduced demand for port services. Our results suggest that firms respond to the opportunities and challenges created by...
ACM Computing Classification System: Data_CODINGANDINFORMATIONTHEORY
free text keywords: corruption; firm behaviour; transport; ports; trade costs, H Social Sciences (General), HE Transportation and Communications, jel:D23, jel:D73, jel:L91, jel:O12, jel:R41
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