Corruption, Bribery and Innovation in CEE: Where is the Link?

Doren Chadee, Banjo Roxas () and Alexandre Kouznetsov ()
Additional contact information
Alexandre Kouznetsov: Torrens University Australia

Journal of Business Ethics, 2021, vol. 174, issue 4, No 2, 747-762

Abstract: Abstract This study investigates the influence of formal and informal institutions on firm innovation in transitional economies of Central and Eastern Europe (CEEs) by explicitly differentiating between corruption and bribery as distinct informal institutions. We integrate institutional theory and legitimacy theory to explain that the failure of formal institutions creates an environment of corruption which encourages firms to use bribes to facilitate economic exchange. We test our hypotheses on the innovation performance of a sample (n = 1603) of firms in 11 CEEs. The results show that weak rule of law and ineffective business regulations in CEEs propagate the perception of corruption that inhibits firm innovation. However, the use of bribery enables firms to transform this environment of corruption into innovation outcomes. The policy and managerial implications of our research for differentiating between corruption and bribery and our findings that bribery acts as the glue that binds formal and informal institutions are fully discussed.

Keywords: Innovation; Bribery; Institutions; Corruption; Central and Eastern Europe (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-021-04925-x Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:174:y:2021:i:4:d:10.1007_s10551-021-04925-x

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-021-04925-x

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().