Victim or Victimizer: Firm Responses to Government Corruption

Document Type

Article

Publication Date

12-7-2010

Abstract

What is the relationship between government corruption and firm performance? To address this question, I conduct a review of articles published in the leading management journals on government‐business interactions pertaining to rent‐seeking activities and integrate findings from the fields of international business, social issues in management, public organization, institutional change, and corporate political activity. I find that while much empirical work corroborates the earlier findings suggesting a corrosive impact of government corruption on firm performance in general, management research also points to the heterogeneous impact of government corruption on individual firm performance, driven by the strategic activities conducted by firms in response to corruption. I propose an integrative model of firm strategy vis‐à‐vis corruption that predicts the activity choice of the firm as predicated by its organizational structure, political resources, industry regulation, and surrounding political and social institutions.

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