Who Benefits from Anti-Corruption Enforcement?

47 Pages Posted: 29 Jan 2021 Last revised: 15 Mar 2021

See all articles by Jim Goldman

Jim Goldman

University of Toronto

Stefan Zeume

University of Illinois at Urbana-Champaign

Date Written: December 9, 2020


We exploit 88 enforcement actions for violations of the US Foreign Corrupt Practices Act in non-OECD countries to study the effect of anti-bribery enforcement on unpunished firms. After anti-bribery enforcement actions take effect, firms in the same country-industry as the violator experience significant increases in revenues (+6.4%) and asset productivity (+4.2%). This result is driven by foreign-owned business group affiliates and amplified when affiliates are (i) active in government-dependent industries, (ii) members of groups with limited corruption experience, and (iii) owned by productive parents. Together with evidence that enforcement actions reduce corruption levels in host countries, our findings support the view that anti-bribery actions result in reallocation of economic activity and level a playing field roughened up by corruption.

Keywords: corruption, law and finance, business groups, firm growth, competition

JEL Classification: G30, G38, K22

Suggested Citation

Goldman, Jim and Zeume, Stefan, Who Benefits from Anti-Corruption Enforcement? (December 9, 2020). Available at SSRN: https://ssrn.com/abstract=3745751 or http://dx.doi.org/10.2139/ssrn.3745751

Jim Goldman (Contact Author)

University of Toronto ( email )

Department of Economics
Toronto, Ontario M5S 3G7

Stefan Zeume

University of Illinois at Urbana-Champaign ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

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