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Market Contestability and Bribe Solicitations: Evidence Across Stages of Firms' Operations

Rajeev Goel, Ummad Mazhar () and James Saunoris

No 6981, CESifo Working Paper Series from CESifo Group Munich

Abstract: Adding to the literature on factors driving corruption and bribery, this paper examines the effect of contestability in business operations on bribe solicitations. Contestability undermines bureaucratic rent-seeking potential and this paper tries to capture this empirically using cross-country survey data. Results show that the relatively greater contestability of business startup procedures compared to startup regulatory times led to fewer bribe demands; however, property registration regulations with lower relative contestability led to more bribe demands, especially for import licenses. Finally, older and larger firms received lower bribe demands, ceteris paribus.

Keywords: bribery; corruption; contestability; import licenses; operating licenses; regulation (search for similar items in EconPapers)
JEL-codes: K42 D73 M21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
Date: 2018
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