Institutional transitions and firms' political behaviors

Kyeungrae Oh

Research output: Contribution to conferencePaper

Abstract

How does institutional underdevelopment facilitate firms' political activities such as lobbying and bribing? How do these activities differ across different types of institutions? Are lobbying and bribing substitutes or complements? Linking new institutional economics with the literature on corporate political strategy, I develop an integrative model illustrating the interactions between institutions and firms' political behaviors. This study contributes to the literature by examining how and why institutions matter in firms' choices of lobbying and bribing, using data on approximately 15,000 firms in 26 transition economies. The results show that weak institutions cause more bribing but less lobbying, and individual institutions have differential effects on firms' political actions. In two distinct time periods, as institutions evolve to feature more market competition, firms are more engaged in lobbying and less involved in bribing, suggesting that lobbying is a substitute for bribing. When a bi-directional causality is applied, lobbying is complementary to bribing, whereas bribing is a substitute for lobbying in the static model.

Original languageEnglish (US)
StatePublished - Dec 1 2009
Event69th Annual Meeting of the Academy of Management, AOM 2009 - Chicago, IL, United States
Duration: Aug 7 2009Aug 11 2009

Other

Other69th Annual Meeting of the Academy of Management, AOM 2009
CountryUnited States
CityChicago, IL
Period8/7/098/11/09

All Science Journal Classification (ASJC) codes

  • Management Information Systems
  • Management of Technology and Innovation
  • Industrial relations

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    Oh, K. (2009). Institutional transitions and firms' political behaviors. Paper presented at 69th Annual Meeting of the Academy of Management, AOM 2009, Chicago, IL, United States.