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Bribes and Corporate Performance : Evidence from a Quasi-Natural Experiment

초록

영어

We examine how bribes may affect corporate performance using a quasi-natural experiment. Specifically, we exploit the 2016 enactment of the Improper Solicitation and Graft Act in Korea which limits provision of gifts and entertainment to public sector employees as an exogenous shock to bribery practices. We find that a firm’s level of bribery activities, instrumented by industry-level government exposure, has a negative impact on its performance. In particular, a reduction in predicted bribery activity results in a significant improvement in operating performance. Overall, our findings provide convincing evidence that bribery may impair corporate performance.

목차

Abstract
1. Introduction
2. The Improper Solicitation and Graft Act in Korea
2.1 Scope of application
2.2 Prohibition of improper solicitations
2.3 Prohibition of acceptance of financial or other advantages
3. Empirical Strategy
3.1. Instrumental variable analysis
3.2. Difference-in-difference analysis
4. Data
4.1. Data Sources and Sample Selection
4.2. Variable Construction
4.3. Descriptive statistics
5. Empirical results
5.1. OLS specification
5.2. IV-2SLS
5.3. Difference-in-difference
6. Conclusion
Reference

저자정보

  • Jieun Im Seoul National University Business School
  • Woojin Kim Professor of Finance at Seoul National University Business School, Seoul, Korea

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