Advertisement

Journal of Business Ethics

, Volume 104, Issue 2, pp 175–184 | Cite as

Government Intervention, Perceived Benefit, and Bribery of Firms in Transitional China

  • Yongqiang Gao
Article

Abstract

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.

Keywords

Bribery Government intervention Mimetic isomorphism Perceived benefit Transitional China 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Brand, V., & Slater, A. (2003). Using a qualitative approach to gain insights into the business ethics experiences of Australian managers in China. Journal of Business Ethics, 45(3), 167–182.CrossRefGoogle Scholar
  2. Brouthers, L. E., & Xu, K. (2002). Product stereotypes, strategy and performance satisfaction: The case of Chinese exporters. Journal of International Business Studies, 33(4), 657–677.CrossRefGoogle Scholar
  3. 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
  4. Buckley, M. R., Wiese, D. S., & Harvey, M. G. (1998). An investigation into the dimensions of unethical behavior. Journal of Education for Business, 73(5), 284–290.CrossRefGoogle Scholar
  5. 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
  6. Coleman, J. S. (1990). Foundations of social theory. Cambridge: Belknap.Google Scholar
  7. Gao, Y. Q. (2010). Mimetic isomorphism, market competition, perceived benefit and bribery of firms in transitional China. Australian Journal of Management, 35(2), 203–222.CrossRefGoogle Scholar
  8. Gordon, W. (1996). Corruption and market reform in China. IDS Bulletin, 27(2), 40–47.CrossRefGoogle Scholar
  9. Haunschild, P. R., & Miner, A. S. (1997). Modes of interorganizational imitation: The effects of outcome salience and uncertainty. Administrative Science Quarterly, 42(3), 472–500.CrossRefGoogle Scholar
  10. Homans, G. (1961). Social behaviour: Its elementary forms. London: Routledge and Kegan Paul.Google Scholar
  11. Hung, H. (2008). Normalized collective corruption in a transitional economy: Small treasuries in large Chinese enterprises. Journal of Business Ethics, 79, 69–83.CrossRefGoogle Scholar
  12. Johnston, M. (2008). Japan, Korea, the Philippines, China: Four syndromes of corruption. Crime, Law and Social Change, 49, 205–223.CrossRefGoogle Scholar
  13. 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
  14. 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).
  15. Lu, X. (1999). From rank-seeking to rent-seeking: Changing administrative ethos and corruption in reform China. Crime, Law, and Social Change, 32(4), 347–370.CrossRefGoogle Scholar
  16. Lu, X. (2000). Cadres and corruption: The organizational involution of the Chinese Communist Party. Stanford, CA: Stanford University Press.Google Scholar
  17. 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.
  18. Manion, M. (2004). Corruption by design: Building clean government in mainland China and Hong Kong. Cambridge: Harvard University Press.Google Scholar
  19. Michaels, J. W., & Miethe, T. (1989). Applying theories of deviance to academic cheating. Social Science Quarterly, 70, 870–885.Google Scholar
  20. National Bureau of Statistics of China. (2010). China statistics yearbook 2009. Beijing: National Bureau of Statistics of China.Google Scholar
  21. Ngo, T. W. (2008). Rent-seeking and economic governance in the structural nexus of corruption in China. Crime, Law and Social Change, 49, 27–44.CrossRefGoogle Scholar
  22. OECD Observer. (September, 2000). The fight against bribery and corruption. OECD Observer, pp. 1–8.Google Scholar
  23. Peng, M., & Luo, Y. (2000). Managerial ties and firm performance in a transition economy: The nature of a micromacro link. Academy of Management Journal, 43(3), 486–501.CrossRefGoogle Scholar
  24. Rose-Ackerman, S. (1978). Corruption: A study in political economy. Diego, CA: Academic Press.Google Scholar
  25. Rose-Ackerman, S. (1999). Corruption and government: Causes, consequences, and reform. Cambridge: Cambridge University Press.Google Scholar
  26. Sanyal, R. (2005). Determinants of bribery in international business: The cultural and economic factors. Journal of Business Ethics, 59, 139–145.CrossRefGoogle Scholar
  27. Shabbir, G., & Anwar, M. (2007). Determinants of corruption in developing countries. The Pakistan Development Review, 46(4 part II), 751–764.Google Scholar
  28. Shahabuddin, S. (2002). The causes and consequences of bribery in international business. International Journal of Management, 19(2), 366–376.Google Scholar
  29. Shleifer, A., & Vishny, R. (1993). Corruption. Quarterly Journal of Economics, 108(3), 599–617.CrossRefGoogle Scholar
  30. Shleifer, A., & Vishny, R. (1998). The grabbing hand: Government pathologies and their cures. Cambridge, MA: Harvard University Press.Google Scholar
  31. Svensson, J. (2003). Who must pay bribes and how much? Evidence from a cross section of firms. Quarterly Journal of Economics, 118, 207–230.CrossRefGoogle Scholar
  32. Transparency International. (2008). Corruption Perceptions Index 2008. Berlin: Transparency International. http://www.transparency.org.
  33. Transparency International. (2010). Corruption Perceptions Index 2010. Berlin: Transparency International. http://www.transparency.org.
  34. Tullock, G. (1996). Corruption theory and practice. Contemporary Economic Policy, 14, 6–13.CrossRefGoogle Scholar
  35. Venard, B., & Hanafi, M. (2008). Organizational isomorphism and corruption in financial institutions: Empirical research in emerging countries. Journal of Business Ethics, 81, 481–498.CrossRefGoogle Scholar
  36. Ward, P. (1989). Corruption development and inequality. Soft touch or hard graft?. Abingdon: Routlege.Google Scholar
  37. World Bank. (June, 1997). Helping countries combat corruption. Poverty Reduction and Economic Management Unit, Report.Google Scholar
  38. World Bank. (November, 2000). Reforming public institutions and strengthening governance. Public Sector Group, Poverty Reduction and Economic Management Network, Report.Google Scholar
  39. Yang, D. D. (2005). Corruption by monopoly: Bribery in Chinese enterprise licensing as a repeated bargaining game. China Economic Review, 16, 171–188.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  1. 1.School of ManagementHuazhong University of Science & Technology (HUST)WuhanPeople’s Republic of China

Personalised recommendations