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The Effect of Corporate Governance on the Corruption of Firms in BRICs (Brazil, Russia, India & China)

Kyunga Na (), Young-Hee Kang () and Yang Sok Kim ()
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Kyunga Na: Department of Accounting and Taxation, Keimyung University, Euiyang Hall 327, Dalgubeol-daero, Dalseo-gu, Daegu 1095, Korea
Young-Hee Kang: Department of Business Administration, Euiyang Hall 412, Keimyung University, Dalgubeol-daero, Dalseo-gu, Daegu 1095, Korea
Yang Sok Kim: Department of Management Information System, Euiyang Hall 333, Keimyung University, Dalgubeol-daero, Dalseo-gu, Daegu 1095, Korea

Social Sciences, 2018, vol. 7, issue 6, 1-16

Abstract: This study examines the correlation between corporate governance and corruption (firm bribery) using 8885 firms in four emerging economies: Brazil, Russia, India, and China (BRICs). The sample firms are collected from the World Bank Enterprise Survey database. To estimate the corruption of a firm, a logistics regression is used. The dependent variable of the logistics regression is a dummy variable on firm bribery while the test variables are a corporate governance metric composed of an ownership structure proxied by the percentage of the largest ownership and that of foreign ownership, Chief Executive Officer (CEO) characteristics proxied by CEO gender and CEO experience in the same sector, and an external audit on a firm’s financial statements. We find that firm bribery is negatively associated with the percentage of the largest ownership and external audit on financial statements, but is positively related to CEO experience. These results suggest that increases in the largest ownership, external audits on financial statements, and a shorter tenure of a CEO in the same sector are negatively associated with firm bribery in BRICs.

Keywords: BRICs; emerging markets; corruption; bribery; corporate governance (search for similar items in EconPapers)
JEL-codes: A B N P Y80 Z00 (search for similar items in EconPapers)
Date: 2018
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