Corporate political activity and bribery in Africa: Do internet penetration and foreign ownership matter?

Tahiru Azaaviele Liedong, Daniel Aghanya, Alfredo Jimenez and Tazeeb Rajwani

Journal of Business Research, 2023, vol. 154, issue C

Abstract: There is significant research on the outcomes of corporate political activity (hereafter CPA). However, despite a few prior studies acknowledging the negative externalities of political activity, little attention has been paid to CPA’s dark side. In this paper, we draw on institutional and corporate governance insights to examine the relationship between CPA and bribery, which is arguably the greatest institutional failure in developing countries. Using pooled data from over 25,000 firms in 41 African countries, we find that lobbying and firm-level bribery are positively related. This relationship is weakened by in-country internet penetration and foreign ownership of firms. Taken together, the results suggest that business-government relations in weak institutional environments help to perpetuate corruption. They also suggest that internet penetration and foreign ownership help to illuminate the dark side of CPA. Leveraging this understanding, we make important contributions to the literature and highlight pertinent practical implications.

Keywords: Corporate political activity; Bribery and corruption; Institutions; Developing countries; Africa (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:154:y:2023:i:c:s0148296322007913

DOI: 10.1016/j.jbusres.2022.113326

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