Regulation and Corporate Corruption: New Evidence from the Telecom Sector

Forthcoming. Journal of Comparative Economics

45 Pages Posted: 26 Nov 2010 Last revised: 26 Jul 2012

See all articles by Sanford V. Berg

Sanford V. Berg

University of Florida - Department of Economics

Liangliang Jiang

Hong Kong Polytechnic University

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Date Written: November 24, 2011

Abstract

This paper examines how government regulation in developing countries affects the form of corruption between business customers and service providers in the telecom sector. We match the World Bank enterprise-level data on bribes with a unique cross-country telecom regulation dataset collected by Wallsten et al. (2004), finding that (1) strong regulatory substance (the content of regulation) and regulatory governance reduce corruption; (2) competition and privatization reduces corruption; (3) the effects of regulatory substance on corruption control are stronger in countries with state-owned or partially state-owned telecoms, greater competition, and higher telecommunication fees; and (4) bureaucratic quality exert substitution effects to regulatory substance in deterring corruption. Overall, our results suggest that regulatory strategies that reduce information asymmetry and increase accountability tend to reduce illegal side-payments for connections.

Keywords: Telecommunications, Regulation, Corruption

JEL Classification: K4, L5, L9

Suggested Citation

Berg, Sanford V. and Jiang, Liangliang and Lin, Chen, Regulation and Corporate Corruption: New Evidence from the Telecom Sector (November 24, 2011). Forthcoming. Journal of Comparative Economics. Available at SSRN: https://ssrn.com/abstract=1714451 or http://dx.doi.org/10.2139/ssrn.1714451

Sanford V. Berg (Contact Author)

University of Florida - Department of Economics ( email )

Gainesville, FL 32611-7140
United States
352-392-0132 (Phone)
352-392-7796 (Fax)

HOME PAGE: http://www.cba.ufl.edu/purc/facultyinfo.asp?WEBID=1260

Liangliang Jiang

Hong Kong Polytechnic University ( email )

11 Yuk Choi Rd
Hung Hom
Hong Kong

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

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