Bribery in International Business in Post-Soviet Union Countries

Data from 1996 to 2016 on perceived levels of bribe taking in 15 post-Soviet Union countries indicate three distinct groups—Russia and seven contiguous countries are most prone to bribe taking, a set of four countries in the southwest less so, and the three Baltic nations are the least corrupt. Public officials in countries that have high economic freedom and human development, are democracies, and proactively adhere to global anti-bribery treaties are less likely to take bribes. The findings show that despite a common recent history, the countries have evolved differently following the breakup. Implications for international businesses are discussed.     

Determinants of Bribery in International Business: The Cultural and Economic Factors

Corruption Perceptions Index (CPI) scores for 47 countries reported by Transparency International were used to ascertain determinants of bribe taking in international business. Two sets of independent variables – economic and cultural – were used in a multiple regression analysis. Results indicate that bribe taking was more likely to be prevalent in countries with low per capita income and lower disparities in income distribution. Cultural factors such as high power distance and high masculinity in a country were also likely to be associated with high level of bribe taking. Both economic and cultural factors were important explanatory factors of bribery. Implications of the findings for combating bribery are discussed. Rajib Sanyal is an American Council of Education Fellow at George Mason University for 2004–2005, on leave from The College of New Jersey, where he is a professor of management. Dr. Sanyal has published widely, and is the author of a textbook on International Management.     

Gender factors and female entrepreneurship: International evidence and policy implications

Nowadays, the transformations taking place in female entrepreneurship at the national and international levels and the importance of such entrepreneurship for economic growth and poverty alleviation underscore the need for more global and diversified analysis of female entrepreneurial activities. The literature however regarding international comparisons of female entrepreneurship practices remains limited and becomes even more limited when exploring such practices beyond the developed countries context. To this end, this paper examined the impact of five gender-related variables on the extent of female entrepreneurial activities in 44 developed and developing countries. Among its five focused variables, the paper found female education, extent of female economic activities, female earnings ratio, and fertility rate to be significant in all estimations with two different dependent variables representing female entrepreneurial activities. The remaining focus variable related to gender empowerment was found to be significant with one of the two dependent variables. Among its contributions, the paper explored gender entrepreneurship from an international perspective and extended the analysis of the topic beyond the main stream Anglo-Saxon context. It also highlighted the variations in results with regards to developed and developing countries environment. Understanding factors that could influence the development of female entrepreneurial activities and exploring their potential variability across stages of economic development could also be useful for policy makers exploring effective incentive structure to promote gender entrepreneurship in their respective countries.     

Bribery in International Business Transactions

Globalization leads to cross-border business transactions between societies with very different norms and regulations regarding bribery. Bribery in international business transactions can be seen as a function of not only the demand for such bribes in different countries, but the supply, or willingness to provide bribes by multinational firms and their representatives. This study addresses the propensity of firms from 30 different countries to engage in international bribery. The study incorporates both domestic (economic development, culture, and domestic corruption in the supplying country) and international factors (those countries’ patterns of trade and involvement in international accords) in explaining the willingness to bribe abroad. The propensity to provide bribes was the lowest when corruption was not tolerated in the multinational firms’ home countries, when the firms’ countries were signatories of the Organization for Economic Cooperation and Development (OECD) anti-bribery convention, and when those countries traded heavily with wealthier nations. Further, these findings are maintained when controlling for levels of economic development and cultural values in the supplying country. In terms of culture, firms from high power distance countries showed a somewhat greater propensity for providing bribes in transactions with less-developed nations.     

Latin America's colonial legacy: The law and its relationship to economic development

This study explores the extent to which Latin America's failure to embrace a system of laws and regulations generally viewed as conducive to capital formation and the broad creation of wealth may be an important factor impairing economic development. The argument here is that the region's adherence to a legal system based on civil law is a factor contributing to Latin America's ongoing lack of economic progress. A composite measure of economic freedom served as the basis for a two‐group discriminant analysis of the civil law countries of Latin America and common law countries. The objective was to test for and explain any statistically significant between‐group differences in levels of economic freedom. © 2006 Wiley Periodicals, Inc.     

Intellectual Property Rights,FDI, R&D and Economic Growth: A Cross‐country Empirical Analysis

This paper aims to empirically examine how intellectual property rights (IPRs) protection, foreign direct investment (FDI) and research and development (R&D), along with other possible variables, may affect the economic growth of the host country. Using the panel data of 92 countries during 1970–2007, I conclude from the system generalised method of moments estimation that domestic investment share, FDI, R&D capacity, openness to trade, human capital and IPRs protection all have statistically significant and positive impacts on economic growth. A further investigation of countries at different levels of development suggests two striking findings. First, besides the domestic investment, openness, human capital and IPRs protection, R&D is the key to drive economic growth in the higher‐income countries, while FDI is the engine of growth in both higher‐income and middle‐income countries. Second, a positive and significant impact of IPRs protection on economic growth is found in both higher‐income and lower‐income countries. However, such an impact is not detected in the middle‐income countries.     

The price of freedom: A Fama–French freedom factor

Economic institutions in-part explain cross-country variation in levels of investment and capital market characteristics. Here, country-level equity returns are related to cross-country differences in economic institutions as measured by an index of economic freedom. The ex-ante level and ex-post change in economic freedom are observed to be country-level equity return factors exhibiting Sharpe ratios greater than that of the value, momentum, and size factors, factors to which change in economic freedom has a low correlation. Fama–MacBeth regressions confirm the economic freedom factor. Finally, the excess return earned from investing in countries with low economic freedom is the price of freedom.     

Re-examination of price level differentials using economic freedom index

Findings reported in this paper provide improved explanation as to what factors are correlated with price levels across a large sample of 152 countries. The results are obtained from using a new set of variables called economic freedom indices, covering 19 years. Prior studies used income, trade openness, and productivity, which led to results with much less explanatory power compared to findings reported in this paper. We apply advanced panel data econometrics to obtain robust estimates of parameters, which, in our view, led to results with substantially high coefficient of variations close to 90%. The findings show that all the nine dimensions of economic freedom used in this study significantly account for the variations in national price levels.     

用经济模型分析中国的反腐败问题

在分析腐败问题的数学模型中 ,有四个变量在发挥作用 ,它们是 :可以收到的贿赂金额、受贿后被查处的概率、官员的薪水以及距离退休的时间。在符合“经济人”假定的条件下 ,必须使得官员不受贿时的期望收益大于受贿时的期望收益 ,他们才不会选择受贿。为了有效遏制中国腐败问题 ,需要采取一些措施标本兼治     

What factors explain stock market retardation in Islamic Countries

Stock markets have been recognized in literature as a source of financial development and economic growth. Notwithstanding the recent trend of the stock market development in emerging countries, some argue that Islamic countries' stock exchanges are still infantile. The central aim of this research, therefore, is to investigate factors impeding stock market development (SMD) in Islamic countries. We explore a panel annual data of 11 main Islamic countries vis-à-vis the developed countries for the period of 1996–2011. The findings show that all of our concerned macroeconomic determinants play a major role in the developed countries. On the other hand, financial openness has substantially less contribution in Islamic countries, while the financial intermediary development plays a major role. The results are also indicative of the need for the Islamic countries to improve their legal environment and economic freedom. Lastly, we also attempt to measure the integration level, where the findings tend to indicate a relatively lower and unstable pattern of integration for the Islamic countries, suggesting the impact of volatile inflows.     

A re-examination of the relation between democracy and international trade

Scholars and policy makers believe that democracy will bring prosperity through integration into the global economy via increased international trade. Existing research is plagued by methodological problems that obscure the empirics and avoid the theoretical problem of why democracies may or may not trade more. In this paper, I seek to correct these shortcomings. I test two theories as to why democracies might trade more. First, political freedom may be correlated with economic freedom, thus prompting higher levels of economic activity, thereby driving states to trade more. Second, democracy implies higher quality governance either through institutions or policy making procedures. To test the impact of democracy on trade and the potential transmission mechanisms, I utilize a bilateral gravity trade model covering approximately 150 countries from 1950 to 1999, with fixed effects for time, importers, and exporters. I find the theory that democracy, and many of its components, promotes international trade unconvincing. The coefficients are the theoretically correct sign; however, many are statistically or economically insignificant and fragile to changes in modeling or data. Economic freedom does not have the expected impact on international trade levels, but quality of governance variables have broad economic and statistical significance.     

The effect of foreign trade and investment liberalization on spatial concentration of economic activity

I examine the varying responses of countries to foreign trade and direct investment liberalization on spatial concentration of their economic activity by taking into consideration moderating factors such as their market size and level of economic development. I argue that liberalization increases the concentration under normal conditions but large market size, and underdevelopment can disperse economic activity. Using data from 168 countries for the period of time starting in 1980s, I found support for all hypotheses.     

The relationship between trade openness and economic growth: Some new insights on the openness measurement issue

Empirical results on the links between trade openness and economic growth often suggest that, in the long run, more outward‐oriented countries register better economic growth. However, a similar level of trade openness can hide different types of trade structures. The aim of this paper was to enrich the way of measuring trade openness taking into account two different dimensions of countries’ integration in world trade: export quality and export variety. Based on the estimation of an endogenous growth model on a panel of 169 countries between 1988 and 2014 using a generalised method of moments estimator, our results confirm that countries exporting higher quality products and new varieties grow more rapidly. More importantly, we find a non‐linear pattern between the export ratio and the quality of the export basket, suggesting that openness to trade may impact growth negatively for countries which are specialised in low‐quality products. A non‐linear relationship between export variety, the export ratio and growth is also found, suggesting that countries increasing their exports will grow more rapidly after reaching a certain degree of the extensive margin of exports.     

新兴市场国家吸引跨国并购的决定因素——从市场化程度视角的解析

近年来,发展中国家外国直接投资的流入量持续增加,并且跨国并购成为越来越重要的外资主要进入模式。本文考察新兴市场发展潜力与吸引跨国并购规模的内在相关性。通过理论和实证分析证实,新兴市场的市场潜力越大,特别是其中经济自由度、市场强度、商业基础设施的发展水平越高,吸引跨国并购的能力也越强。本文的启示是新兴市场国家市场经济制度的完善及与发达国家的接轨是提高吸收外资竞争力的重要条件。     

A comparison of Nigerian to American views of bribery and extortion in international commerce

This study investigates the differences in the way bribery and extortion is perceived by two different cultures — American and Nigerian. Two hundred and forty American business students and one hundred and eighty Nigerian business students were presented with three scenarios describing a businessman offering a bribe to a government official and three scenarios describing a businessman being forced to pay a bribe to an official in order to do business. The Reidenbach-Robin instrument was used to measure the ethical reactions of the two samples to these scenarios. Results indicate that ethical reactions to bribery and extortion vary by (a) the nationality of the person offering the bribe, and (b) the country where the bribe is offered. In addition, Nigerians perceived some of the scenarios as being less unethical than did Americans. John Tsalikis is an Assistant Professor of Marketing at Florida International University. His research interests include marketing ethics, international marketing, and direct marketing. His articles have appeared in the Journal of the Academy of Marketing Science, Journal of Business Ethics, Psychology and Marketing, and the Journal of International Consumer Marketing. Osita Nwachukwu is an Assistant Professor of Management at Western Illinois University. His research interests include marketing ethics, and business policy. His articles have appeared in the Journal of Business Ethics, and the Journal of International Consumer Marketing.     

Bribery and extortion in international business: Ethical perceptions of Greeks compared to Americans

This study investigates the differences in he way bribery and extortion is perceived by two different cultures — American and Greek. Two hundred and forty American business students and two hundred and four Greek business students were presented with three scenarios describing a businessman offering a bribe to a government official and three scenarios describing a businessman being forced to pay a bribe to an official in order to do business. The Reidenbach-Robin instrument was used to measure the ethical reactions of the two samples to these scenarios. Results indicate that ethical reactions to bribery and extortion vary by (a) the nationality of the person offering the bribe, and (b) the country where the bribe is offered. In addition, Greeks perceived some of the scenarios as being less unethical than did Americans.John Tsalikis is an Associate Professor of Marketing at Florida International University. His research interests include marketing ethics, international marketing, and direct marketing. His articles have appeared in theJournal of the Academy of Marketing Science, Journal of Business Ethics, Psychology and Marketing, and theJournal of International Consumer Marketing.Michael S. LaTour is an Associate Professor of Marketing at Auburn University. His research interests include marketing ethics, and emotional responses to advertising. His articles have appeared in theJournal of Business Ethics, Psychology and Marketing, Journal of Health Care Marketing, and theJournal of Advertising.The authors contributed equally to this article.     

What drives the capital flows into BRICS economies?

Understanding what drives the capital flows has important policy implications for countries in managing the direction and magnitude of such flows. This paper empirically investigates the main drivers of capital flows into the fast‐growing BRICS countries, in the backdrop of their growing inward capital flows. Employing a fully balanced panel for the period 1995–2015, we focus on, among others, the hitherto commonly untested variables: sovereign credit ratings, economic freedom and ease of doing business ranking of these countries. In searching for the relevant interaction and causality among the drivers of capital flows, we employ the panel Granger causality test to arrive at the policy implications. The results suggest that market size is a significant driver of capital flows. In addition to infrastructure, economic freedom in the host countries, ease of doing business ranking and sovereign credit ratings are the main drivers in the long‐run growth of capital flows.     

An Empirical Investigation on Firms’ Proactive and Passive Motivation for Bribery in China

This research investigates firms’ bribery motivations in China. Based on resource dependence theory and anomie theory, we identify resource conditions as firms’ proactive motivation to bribe and firms’ perceived institutional environment as their passive motivation to bribe. We use the data from 2002 World Business Environment Survey, collected by the World Bank, to investigate firms’ bribery in the world’s largest emerging market, China. We employ a multi-level logistic model to test our hypotheses. The results show that unsatisfactory general and task environmental conditions may trigger firms to bribe in order to compete for better resources and opportunities; institutional conditions such as the security expenditure and anomie climate may make firms perceive bribery as a common phenomenon and thus induce firms to bribe. This research provides some insights to understand business bribery behaviors in emerging market. It also discusses some managerial implications and guidelines for policy-making from the findings.     

Paths of economic development: A global evidence for the mediating role of human capital

ABSTRACT

This paper revisits the roles of institutions and human capital in the development process by using structural equation modeling with a latent construct. Two models are constructed by using the data of 143 countries with 14 publicly available indicators; non-mediated (Model A) and mediated one (Model B). A path between institutional quality and economic development is identified in Model A and found as significant. When human capital is added into the Model B as a mediator, the direct relationship between institutional quality and economic development which is confirmed in Model A becomes insignificant. This evidence contributes to the debate by explaining the roles of institutions and human capital in the development process, based on the existing level of institutional quality that determines conditions on decisions for starting or sustaining the development process. In other words, (a) improving institutions in addition to human capital is needed for the countries with low level of institutional quality to start development process and; (b) on the other hand, since the human capital develops immunity on the quality of the institutions, human capital plays a more basic role to sustain the development process for the countries with a high level of institutional quality.     

Consumers’ subjective and objective consumerism knowledge and subsequent complaint behaviour concerning consumer electronics: a South African perspective

Although there is immense international support for consumer protection, the notion exists that consumer protection can only exist in developed countries with ample fiscal resources and expertise to properly act in the interest of consumers. This conception leaves consumers in emerging and transitional economies in a difficult position as these economies indeed generally lack sufficient funding and the required capacity to educate consumers on their rights. With the South African Consumer Protection Act that came into effect in 2011, South African consumers can now claim to be among the best protected consumers in the world. However, many consumers are still not aware of their consumer rights, and do not have the necessary knowledge to pursue redress when they are dissatisfied. The objective of this research was therefore to explore and describe the relationship between consumers’ knowledge of consumerism (consumer protection) and their consumer complaint behaviour (CCB) concerning their dissatisfaction with a technologically advanced product, in this case, a consumer electronic product. This study attempts to differentiate between subjective consumerism knowledge and objective consumerism knowledge and by extension the measures used. In addition, we explored and described the relationship between demographic variables and levels of subjective and objective consumerism knowledge as well as the combined effect of the two types of knowledge on CCB. The findings revealed that the respondents had a reasonable level of subjective consumerism knowledge relative to a low level of objective consumerism knowledge. No significant relationship was found between subjective consumerism knowledge and demographic variables. However, the factors of race, gender and level of income were related to objective knowledge. A higher level of subjective knowledge could be associated with public action. Respondents with reasonable levels of objective knowledge were also better equipped to take private and public action. CHAID (Chi‐Square Automatic Interaction Detection) analysis highlighted that a combination of subjective and objective knowledge was the best predictor of taking public action only and of taking both private and public complaint action. The study has implications for policy makers, consumer protection organisations, retailers and the individual consumer. Our approach to measuring knowledge of consumerism could possibly be applied in other emerging contexts where consumers generally lack awareness of consumer protection.