TY - UNPB

T1 - Strong Firms Lobby, Weak Firms Bribe

T2 - A survey-based analysis of the demand for influence and corruption

AU - Bennedsen, Morten

AU - Feldmann, Sven E.

AU - Lassen, David Dreyer

PY - 2009

Y1 - 2009

N2 - We use survey responses by firms to examine the firm-level determinants and effects of political influence, their perception of corruption and prevalence of bribe paying. We find that: (a) measures of political influence and corruption/bribes are uncorrelated at the firm level; (b) firms that are larger, older, exporting, government-owned, are widely held and/or have fewer competitors, have more political influence, perceive corruption to be less of a problem and pay bribes less often; (c) influence increases sales and government subsidies and in general makes the firm have a more positive view on the government. In sum, we show that strong firms use their influence to bend laws and regulations, whereas weak firms pay bribes to mitigate the  costs of government intervention.

AB - We use survey responses by firms to examine the firm-level determinants and effects of political influence, their perception of corruption and prevalence of bribe paying. We find that: (a) measures of political influence and corruption/bribes are uncorrelated at the firm level; (b) firms that are larger, older, exporting, government-owned, are widely held and/or have fewer competitors, have more political influence, perceive corruption to be less of a problem and pay bribes less often; (c) influence increases sales and government subsidies and in general makes the firm have a more positive view on the government. In sum, we show that strong firms use their influence to bend laws and regulations, whereas weak firms pay bribes to mitigate the  costs of government intervention.

M3 - Working paper

BT - Strong Firms Lobby, Weak Firms Bribe

PB - Department of Economics, University of Copenhagen

ER -