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Market Contestability and Bribe Solicitations: Evidence Across Stages of Firms' Operations

Author

Listed:
  • Rajeev K. Goel
  • Ummad Mazhar
  • James W. Saunoris

Abstract

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.

Suggested Citation

  • Rajeev K. Goel & Ummad Mazhar & James W. Saunoris, 2018. "Market Contestability and Bribe Solicitations: Evidence Across Stages of Firms' Operations," CESifo Working Paper Series 6981, CESifo.
    • Handle: RePEc:ces:ceswps:_6981
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    References listed on IDEAS

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    More about this item

    Keywords

    bribery; corruption; contestability; import licenses; operating licenses; regulation;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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