Government Intervention, Perceived Benefit, and Bribery of Firms in Transitional China
This article examines whether (1) government intervention causes bribery (or corruption) as rent-seeking theory suggested; (2) a firm’s perceived benefit partially mediates the relationship between government intervention and its bribing behavior, as rational choice/behavior theory suggested; and (3) other firms’ bribing behavior moderates the relationship between government intervention and a firm’s perceived benefit. Our study shows that government intervention causes bribery/corruption indeed, but it exerts its effect on bribery/corruption through the firm’s perceived benefit. In other words, a firm’s perceived benefit fully mediates the relationship between government intervention and its bribing behavior. We also find that other firms’ bribery positively moderates the relationship between government intervention and a given firm’s bribery. This study partly proves that firms are rational actors. Potential benefit encourages them to practice bribery. Besides, this research also supports the rent-seeking view of bribery/corruption, which argues that government intervention is a source of bribery/corruption. However, we have also identified that only those government interventions that will create “rent” can cause bribery/corruption.
KeywordsBribery Government intervention Mimetic isomorphism Perceived benefit Transitional China
Unable to display preview. Download preview PDF.
- Buchanan, J. M. (1980). Rent seeking and profit seeking. In J. M. Buchanan, R. D. Tollison, & G. Tullock (Eds.), Toward a theory of the rent-seeking society (pp. 3–15). College Station, TX: A&M University Press.Google Scholar
- Chow, G. C. (2006). Corruption and China’s economic reform in the early 21st century. International Journal of Business, 11(3), 265–282.Google Scholar
- Coleman, J. S. (1990). Foundations of social theory. Cambridge: Belknap.Google Scholar
- Homans, G. (1961). Social behaviour: Its elementary forms. London: Routledge and Kegan Paul.Google Scholar
- Li, S., & Ouyang, M. (2007). A dynamic model to explain the bribery behavior of firms. International Journal of Management, 24(3), 605–618.Google Scholar
- Liu, N. (June 10, 2008). Recent observation of the anti-corruption approach in China. http://www.fjrd.gov.cn/fjrdww/Desktop.aspx?path=/Homepage/rmztnew/view&gid=6a2ea07f-ca12-4aaa-8568-8cf5bfb513ab (in Chinese).
- Lu, X. (2000). Cadres and corruption: The organizational involution of the Chinese Communist Party. Stanford, CA: Stanford University Press.Google Scholar
- Macher, J. T., Mayo, J. W., & Nickerson, J. A. (2006). Exploring the information asymmetry gap: Evidence from FDA regulation. Working paper. http://faculty.msb.edu/jtm4/papers/MMN.2007.pdf.
- Manion, M. (2004). Corruption by design: Building clean government in mainland China and Hong Kong. Cambridge: Harvard University Press.Google Scholar
- Michaels, J. W., & Miethe, T. (1989). Applying theories of deviance to academic cheating. Social Science Quarterly, 70, 870–885.Google Scholar
- National Bureau of Statistics of China. (2010). China statistics yearbook 2009. Beijing: National Bureau of Statistics of China.Google Scholar
- OECD Observer. (September, 2000). The fight against bribery and corruption. OECD Observer, pp. 1–8.Google Scholar
- Rose-Ackerman, S. (1978). Corruption: A study in political economy. Diego, CA: Academic Press.Google Scholar
- Rose-Ackerman, S. (1999). Corruption and government: Causes, consequences, and reform. Cambridge: Cambridge University Press.Google Scholar
- Shabbir, G., & Anwar, M. (2007). Determinants of corruption in developing countries. The Pakistan Development Review, 46(4 part II), 751–764.Google Scholar
- Shahabuddin, S. (2002). The causes and consequences of bribery in international business. International Journal of Management, 19(2), 366–376.Google Scholar
- Shleifer, A., & Vishny, R. (1998). The grabbing hand: Government pathologies and their cures. Cambridge, MA: Harvard University Press.Google Scholar
- Transparency International. (2008). Corruption Perceptions Index 2008. Berlin: Transparency International. http://www.transparency.org.
- Transparency International. (2010). Corruption Perceptions Index 2010. Berlin: Transparency International. http://www.transparency.org.
- Ward, P. (1989). Corruption development and inequality. Soft touch or hard graft?. Abingdon: Routlege.Google Scholar
- World Bank. (June, 1997). Helping countries combat corruption. Poverty Reduction and Economic Management Unit, Report.Google Scholar
- World Bank. (November, 2000). Reforming public institutions and strengthening governance. Public Sector Group, Poverty Reduction and Economic Management Network, Report.Google Scholar