Featured Research

from universities, journals, and other organizations

Capitalizing on corruption: Not all companies harmed by corruption, study finds

Date:
March 21, 2011
Source:
Wiley - Blackwell
Summary:
According to a new study, corruption, which is endemic in many countries, can benefit the performance of some companies. Without doubt, corruption stands as a corrosive influence on investment and economic growth, but the corrosive nature of corruption does not necessarily hamper all companies equally.

According to a new study from the Journal of Management Studies, corruption, which is endemic in many countries, can benefit the performance of some companies. Without doubt, corruption stands as a corrosive influence on investment and economic growth, but the corrosive nature of corruption does not necessarily hamper all companies equally.

Indeed, companies with an advantage in operating in corrupt countries are likely to be pre-disposed to protecting that advantage. Attempts to eliminate government corruption therefore must be mindful of the potentially strong reactions of the numerous public and private stakeholders that benefit from its illicit largesse. This study on corruption and its influence on company strategy and economic performance is now published in the Journal of Management Studies.

Corruption, with good reason, is a vilified feature of many markets. Corruption creates uncertainty, it hampers economic growth and development, and it leads to an unfair and an inequitable distribution of wealth. Yet, it is also an inescapable feature of doing business in many countries.

The key idea in this study is that operating in a corrupt country can help a company to develop organizational capabilities, and not necessarily illicit capabilities, to operate successfully in such an environment. These capabilities can lead a company to meet with more success when investing internationally in other countries with high levels of corruption, even where competitors fail on entry or dare not to tread.

Although corruption is the centerpiece of this research, the study develops a sophisticated consideration of how a firm can develop political resources to devise and implement strategies in countries that vary in their level of regulatory control and capture. The author identifies how strategies such as political networking, joint venturing, seeking regulatory change or capture, forming a group structure, or accepting bureaucratic delays in the absence of paying bribes each have their own value in different countries.

Corruption can be a hazardous feature of international investment, but as noted by the author of the study, "the heterogeneous impact of government corruption on firm outcomes, is dependent not only on the power wielded by dishonest officials, but also influenced by firm characteristics, industry regulations, political structures, social norms and organizational culture." Thus, corruption can be a distasteful but manageable part of a company's international investment environment.


Story Source:

The above story is based on materials provided by Wiley - Blackwell. Note: Materials may be edited for content and length.


Journal Reference:

  1. Roberto Martin N. Galang. Victim or Victimizer: Firm Responses to Government Corruption. Journal of Management Studies, 2011; DOI: 10.1111/j.1467-6486.2010.00989.x

Cite This Page:

Wiley - Blackwell. "Capitalizing on corruption: Not all companies harmed by corruption, study finds." ScienceDaily. ScienceDaily, 21 March 2011. <www.sciencedaily.com/releases/2011/03/110321102120.htm>.
Wiley - Blackwell. (2011, March 21). Capitalizing on corruption: Not all companies harmed by corruption, study finds. ScienceDaily. Retrieved July 23, 2014 from www.sciencedaily.com/releases/2011/03/110321102120.htm
Wiley - Blackwell. "Capitalizing on corruption: Not all companies harmed by corruption, study finds." ScienceDaily. www.sciencedaily.com/releases/2011/03/110321102120.htm (accessed July 23, 2014).

Share This




More Science & Society News

Wednesday, July 23, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Courts Conflicted Over Healthcare Law

Courts Conflicted Over Healthcare Law

AP (July 22, 2014) Two federal appeals courts issued conflicting rulings Tuesday on the legality of the federally-run healthcare exchange that operates in 36 states. (July 22) Video provided by AP
Powered by NewsLook.com
What Self-Made Women Need to Know Financially Before Getting Hitched

What Self-Made Women Need to Know Financially Before Getting Hitched

TheStreet (July 21, 2014) Halle Berry was recently ordered to pay her ex-boyfriend Gabriel Aubry $16,000 a month in child support by a California judge for their daughter Nahla. As women make strides in the workforce, they are increasingly left holding the bag when relationships end regardless of marital status. 'What Monied Women Need to Know Before Getting Married or Cohabitating' discusses information such as debt incurred during the marriage is both spouse's responsibility at divorce, whether after ten years of marriage spouses are entitled to half of everything and why property acquired within the marriage is fair game without a pre-nup. Video provided by TheStreet
Powered by NewsLook.com
$23.6 Billion Awarded To Widow In Smoking Lawsuit

$23.6 Billion Awarded To Widow In Smoking Lawsuit

Newsy (July 20, 2014) Cynthia Robinson claims R.J. Reynolds Tobacco Company hid the health and addiction risks of its products, leading to the death of her husband in 1996. Video provided by Newsy
Powered by NewsLook.com
Clock Ticks Down on Internet Speed Debate

Clock Ticks Down on Internet Speed Debate

Reuters - US Online Video (July 18, 2014) The FCC received more than 800,000 comments on whether and how internet speeds should be regulated, even crashing its system. Lily Jamali reports. Video provided by Reuters
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins