Different role of lobbying and bribery on the firm performance in emerging markets
Abstract
Purpose
Firms influence a government to their advantage in one of two ways: either through lobbying a government to change the rule, or through bribing bureaucrats to circumvent the rule. The purpose of this paper is to investigate whether and under what conditions do corporate political activities facilitate firm growth in a multinational context, especially in developing economies.
Design/methodology/approach
This study is based on the data of the World Bank’s Enterprise Survey, conducted by the World Bank in the 2002 to 2006 period in 12 countries. To deal with a multilevel structure, the authors applied multilevel regression as the main analysis method.
Findings
The analysis reveals that both political activities are prevalent in emerging markets, but they play very different roles on firm growth. The authors also find that the effect of lobbying is more pronounced in politically durable countries where firms can secure their vested benefits by lobbying.
Originality/value
The paper contributes to the corporate political activities literature by investigating the distinguishing and contingent role of bribery and lobbying on firm performance.
Keywords
Acknowledgements
The authors appreciate financial support provided by National Science Foundation of China (No. 71525004 and 71472010) and Beijing Planning Office of Philosophy and Social Science (No. 11JGB018).
Citation
Yim, H.R., Lu, J. and Choi, S.-j. (2017), "Different role of lobbying and bribery on the firm performance in emerging markets", Multinational Business Review, Vol. 25 No. 3, pp. 222-238. https://doi.org/10.1108/MBR-07-2017-0050
Publisher
:Emerald Publishing Limited
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