Market Contestability and Bribe Solicitations: Evidence Across Stages of Firms' Operations
20 Pages Posted: 11 Jun 2018
Date Written: April 19, 2018
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: Suggested Citation