Innovation in corrupt environments: Firm strategies to cope with political corruption.
Type
conference paper
Date Issued
2022-06-30
Author(s)
Abstract
This paper investigates three organizational behaviors in response to political corruption to accelerate innovation activities: (1) bribery, (2) lobbying through business associations, and (3) political connection in top management. Corruption impedes firm innovation by increasing cost and uncertainty in regulations, protectionism, R&D subsidies, provision of public goods, and intellectual property protection. Based on resource dependence theory, we argue that innovative firms can survive the detrimental effect of a corrupt environment because they act to minimize the dependence on external resources controlled by political actors. Employing a multi-level analysis of 15,483 firms in 39 countries from the World Bank Enterprise Survey (WBES) 2017 - 2019, we find the empirical evidence that supports (1) the significant role of lobbying and political connection in meditating the negative impact of managers' perception of corruption on product innovation. (2) In contrast to product innovation, managers' perception of corruption leads to process innovation as a strategy to improve internal efficiency and reduce dependence on external resources. (3) Under the presence of two strategies: lobbying and political connection, bribery has a less pronounced effect on process innovation and no significance on product innovation.
Language
English
Keywords
resource dependence theory
perception of corruption
product innovation
process innovation
HSG Classification
contribution to scientific community
Event Title
AMJ Paper Workshop Development: Making Theoretical AND Practical Impact
Event Location
Amsterdam
Event Date
30 June - 1 July, 2022
Subject(s)
Division(s)
Contact Email Address
ngocquynh.dao@unisg.ch
Eprints ID
268061