How Much Do Firms Pay as Bribes and What Benefits Do They Get? Evidence from Corruption Cases Worldwide

71 Pages Posted: 6 Apr 2012 Last revised: 20 Aug 2021

See all articles by Yan-Leung Cheung

Yan-Leung Cheung

The Education University of Hong Kong

P. Raghavendra Rau

University of Cambridge

Aris Stouraitis

Hong Kong Baptist University (HKBU) - Department of Finance and Decision Sciences

Multiple version iconThere are 2 versions of this paper

Date Written: April 2012

Abstract

We analyze a hand-collected sample of 166 prominent bribery cases, involving 107 publicly listed firms from 20 stock markets that have been reported to have bribed government officials in 52 countries worldwide during 1971-2007. We focus on the initial date of award of the contract for which the bribe was paid (rather than of the revelation of the bribery). Our data enable us to describe in detail the mechanisms through which bribes affect firm value. We find that firm performance, the rank of the politicians bribed, as well as bribe-paying and bribe-taking country characteristics affect the magnitude of the bribes and the benefits that firms derive from them.

Suggested Citation

Cheung, Yan-Leung and Rau, P. Raghavendra and Stouraitis, Aristotelis, How Much Do Firms Pay as Bribes and What Benefits Do They Get? Evidence from Corruption Cases Worldwide (April 2012). NBER Working Paper No. w17981, Available at SSRN: https://ssrn.com/abstract=2035325

Yan-Leung Cheung (Contact Author)

The Education University of Hong Kong ( email )

Department of Social Sciences
10 Lo Ping Road, Tai Po, New Territories
Hong Kong
Hong Kong

P. Raghavendra Rau

University of Cambridge ( email )

Cambridge Judge Business School
Trumpington Street
Cambridge, Cambridgeshire CB21AG
United Kingdom
3103626793 (Phone)

HOME PAGE: http://www.raghurau.com/

Aristotelis Stouraitis

Hong Kong Baptist University (HKBU) - Department of Finance and Decision Sciences ( email )

Hong Kong

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