Corruption pressure on business revisited: Bribery incidence in European countries

Abstract

Purpose: This paper investigates whether within the European countries with a prevalent number of companies in particular sectors the corrupt rent-seeking practice is more likely to contaminate the entire business sector. Methodology: Multiple regression analysis was conducted to investigate the determinants of corruption pressure on the business sector. Results: We found that the share of retail and wholesale trade and public companies in the economy is related to bribery incidence experienced in the domestic business sector as a whole and that the ease of doing business together with EU membership reduces the spread of corruption risk. The transmissible effect of bribery incidence in one sector on the rest of the companies is observed, notwithstanding the post-transition status of a European country. Conclusion: There is a relationship between the share of retail and wholesale trade and public companies in an economy and bribery incidence experienced by the entire business sector indicating that there might be a spillover effect of bribing in one sector on the rest of the companies.

Keywords

• bribery incidence
• doing business
• retail and wholesale trade
• public companies
• spillover effect