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Strategic location of firms: Does it empower bribe givers or bribe takers?

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  • Goel, Rajeev K.
  • Mazhar, Ummad
  • Sayan, Serdar

Abstract

This paper uses survey data on the corruption experience (rather than corruption perceptions) of firms located in different types of cities in more than one hundred countries to analyze the impact of firms’ strategic location on corruption. In a corrupt economy, location might influence the ability of bureaucrats/politicians and firms to extract and dodge rents. Placing the analysis in the literature on determinants of corruption, our results reveal that the corruption experiences of firms located in nations’ capital cities are qualitatively different from firms located elsewhere: they do not experience greater corruption, while firms in large cities and main business cities do. However, when manufacturing and service firms are considered separately, their corruption experience and perceptions differ.

Suggested Citation

  • Goel, Rajeev K. & Mazhar, Ummad & Sayan, Serdar, 2021. "Strategic location of firms: Does it empower bribe givers or bribe takers?," Economic Systems, Elsevier, vol. 45(3).
    • Handle: RePEc:eee:ecosys:v:45:y:2021:i:3:s0939362521000212
    DOI: 10.1016/j.ecosys.2021.100873
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    Cited by:

    1. Amin, Mohammad & Motta, Victor, 2023. "The impact of corruption on SMEs’ access to finance: Evidence using firm-level survey data from developing countries," Journal of Financial Stability, Elsevier, vol. 68(C).
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    3. Ummad Mazhar, 2021. "Terrorism Risk and the Mediating Role of Manager Experience: Empirical Evidence," Asian Economic Journal, East Asian Economic Association, vol. 35(3), pages 317-337, September.

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    More about this item

    Keywords

    Corruption experience; Corruption intensity; Bribery; Location; Capital city; Main business city; Large city;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other

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