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Are Manager-controlled Firms More Likely to Bribe than Shareholder-controlled Firms: A Cross-cultural Analysis

Published online by Cambridge University Press:  02 July 2015

Chung-wen Chen ,
John B. Cullen  and
K. Praveen Parboteeah
Chung-wen Chen
Affiliation:
National Taiwan University of Science and Technology, Taiwan
John B. Cullen
Affiliation:
Washington State University, USA
K. Praveen Parboteeah
Affiliation:
University of Wisconsin–Whitewater, USA
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Abstract

To examine the bribing behavior of firms, we developed a cross-level moderation model using agency theory at the firm level and anomie theory at the societal level to investigate the relationship between manager control of firms and firm bribery activity. The results of this cross-cultural analysis using a sample of 1,799 firms from 38 nations showed that at the firm level, manager-controlled firms (MCFs) have a higher propensity to bribe than shareholder-controlled firms. At the country level, bribery is higher in MCFs (relative to shareholder-controlled firms) in societies with a low level of institutional collectivism, a high level of uncertainty avoidance, economic change, and income inequality. Contrary to the hypothesis, the relationship between bribery and manager control is stronger rather than weaker in societies with press freedom. Implications for future research and practices are discussed.

Keywords

agency theoryanomie theorybribecross-culturalfirm control
Type
Articles
Information
Management and Organization Review , Volume 11 , Issue 2 , June 2015 , pp. 343 - 365
Copyright
Copyright © The International Association for Chinese Management Research 2015 

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