Breaking down corruption: Determinants of bribery and its relation to firm innovation in selected ASEAN countries

• Main Authors: Espero, Charizze Angeli, Mendoza, Reed Wolfe, Penafiel, Hannah Marie, Ong, Trisha Hanna Ysabel
• Format: text
• Language: English
• Published: Animo Repository 2021
• Subjects: Bribery; Business enterprises—Finance; Economics
• Online Access: https://animorepository.dlsu.edu.ph/etdb_econ/10; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1009&context=etdb_econ
• Institution: De La Salle University

Throughout time and history, corruption has always been a prevalent occurrence. One of its most common forms is bribery, known as the act of giving or offering something of value to solicit a favorable response from another individual. While research has established that bribery is caused by various socio-economic and institutional factors, there remains a considerable question as to what extent it can positively affect the business environment. Furthermore, bribery also affects innovation, as it indicates firm performance and activity. This paper aims to build on the existing literature on bribery and its effects on the innovation of firms through the analysis of firm-level data from the World Bank Enterprise Surveys (WBES). A two stage least squares regression model was constructed to capture the determinants of bribery and the effect of bribery on innovation. It was shown that there were varying results depending on the country and indicator of innovation used. Overall, bribe was significant to firms that used licensed technology and email in Indonesia, developed new products and process innovation in Malaysia, and firms that used email in Vietnam.