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Lobbying and Bribes - A Survey-Based Analysis of the Demand for Influence and Corruption

Author

Listed:
  • Morten Bennedsen
  • Sven Feldmann
  • David Dreyer Lassen

Abstract

We use survey responses by firms to examine the firm-level determinants and effects of political influence, their perception of corruption and prevalence of bribe paying. We find that: (a) measures of political influence and corruption/bribes are uncorrelated at the firm level; (b) firms that are larger, older, exporting, government-owned, are widely held and/or have fewer competitors have more political influence, perceive corruption to be less of a problem and pay bribes less often; (c) influence increases sales and government subsidies and in general makes the firm have a more positive view on the government. In sum, we show that “strong” firms use their influence to bend laws and regulations, whereas “weak” firms pay bribes to mitigate the costs of government intervention.

Suggested Citation

  • Morten Bennedsen & Sven Feldmann & David Dreyer Lassen, 2011. "Lobbying and Bribes - A Survey-Based Analysis of the Demand for Influence and Corruption," CESifo Working Paper Series 3496, CESifo.
    • Handle: RePEc:ces:ceswps:_3496
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    Citations

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    Cited by:

    1. Kiselev, Eugene, 2013. "Lobbying, Corruption, and Regulatory Constraints: An Analysis of Eastern European Business Associations," MPRA Paper 51936, University Library of Munich, Germany.
    2. Jaeschke, Reemda & Lopatta, Kerstin & Yi, Cheong, 2018. "Managers’ use of language in corrupt firms’ financial disclosures: Evidence from FCPA violators," Scandinavian Journal of Management, Elsevier, vol. 34(2), pages 170-192.
    3. Thede, Susanna & Karpaty, Patrik, 2023. "Effects of corruption on foreign direct investment: Evidence from Swedish multinational enterprises," Journal of Comparative Economics, Elsevier, vol. 51(1), pages 348-371.
    4. Susanna Thede & Nils-Åke Gustafson, 2017. "Bending the rules, breaking the rules: How corruption and lobbying affect the investment market selection of Swedish firms," The World Economy, Wiley Blackwell, vol. 40(7), pages 1266-1290, July.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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