Drinking poison to quench thirst: Does bribery foster firm performance in China?

Kevin Zheng Zhou, Kui Wang, Dean Xu and En Xie

Journal of Business Research, 2022, vol. 147, issue C, 505-517

Abstract: Whereas the damage of bribery on economic development is well recognized, controversy exists regarding whether it can benefit firm-level performance. By integrating the “grease” and “sand” views of bribery, this study offers the novel proposition that even though bribery may provide a means to deal with institutional voids, such that it fosters firms’ short-term performance (i.e., sales growth), it hinders long-term performance reflected in market capitalization. Moreover, the positive effect of bribery on sales growth decreases and its negative impact on market capitalization increases when the level of institutional development is higher. A longitudinal data set of Chinese listed firms lends strong support to our predictions, which in turn offer novel insights into bribery and its performance implications.

Keywords: Bribery; Sales growth; Firm value; Institutional voids; Emerging markets (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:147:y:2022:i:c:p:505-517

DOI: 10.1016/j.jbusres.2022.04.038

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