Businesses' perception of government red tape and its impact on participation in bribery: Evidence from the ASEAN region

• Main Authors: Jopson, Edgardo Manuel, Lee, Sooyeon, Te, Kristianie
• Format: text
• Language: English
• Published: Animo Repository 2014
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/11972
• Institution: De La Salle University

Excessive regulation, commonly known as red tape, is one of the problems that businesses face which hinders firm performance. Literature suggests that its presence in the economy comes from both the demand and supply side both the government and firms conspire to defraud the public and take advantage of the situation, and the gravity of it will depend on how inefficient the government is, since a higher opportunity cost of starting a business can provide an incentive for firms to pay the government to hasten their services. Using the Enterprise Surveys, the Doing Business indicators as well as the World Development Indicators databases from the World Bank, we employed a series of econometric tests to determine and understand the impact of the business environment and red tape on the incidence of bribery. The study suggests that the probability of firms participating in bribery is largely affected not only by the characteristics of firms, taken from a study of Herrera and Lijane (2007),but also by the firm's perception of red tape as well as the ease in doing business in the country.