Market Contestability and Bribe Solicitations: Evidence Across Stages of Firms' Operations

20 Pages Posted: 11 Jun 2018

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

Ummad Mazhar

Shaheed Zulkar Ali Bhutto Institute of Science and Technology

James W. Saunoris

Eastern Michigan University

Date Written: April 19, 2018

Abstract

Adding to the literature on factors driving corruption and bribery, this paper examines the effect of contestability in business operations on bribe solicitations. Contestability undermines bureaucratic rent-seeking potential and this paper tries to capture this empirically using cross-country survey data. Results show that the relatively greater contestability of business startup procedures compared to startup regulatory times led to fewer bribe demands; however, property registration regulations with lower relative contestability led to more bribe demands, especially for import licenses. Finally, older and larger firms received lower bribe demands, ceteris paribus.

Keywords: bribery, corruption, contestability, import licenses, operating licenses, regulation

JEL Classification: K420, D730, M210

Suggested Citation

Goel, Rajeev K. and Mazhar, Ummad and Saunoris, James W., Market Contestability and Bribe Solicitations: Evidence Across Stages of Firms' Operations (April 19, 2018). CESifo Working Paper Series No. 6981. Available at SSRN: https://ssrn.com/abstract=3193897

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

Ummad Mazhar

Shaheed Zulkar Ali Bhutto Institute of Science and Technology ( email )

90 and 100 Clifton
Karachi, ISLAMABAD 75600
Pakistan

James W. Saunoris

Eastern Michigan University ( email )

Eastern Michigan University
Ypsilanti, MI 48197
United States

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