Bribery and Export Intensity: the Role of Formal Institutional Constraint Susceptibility

This study explores the influence of home country formal institutional constraints on firm bribery payments and export intensity. Distinguishing between forms of formal institutional constraints based on their susceptibility to bribery, this study highlights the different mechanisms through which formal institutional constraints impact export intensity. I propose that highly susceptible formal institutional constraints will behave as incentives leading to increased bribery payments. In contrast, less-susceptible formal institutional constraints will act as an added cost, ex-post to bribery payments, in the bribery-export intensity relationship. These less-susceptible formal institutional constraints will further decrease export intensity. Utilizing a firm-level dataset from 25 countries, I find support for the proposed relationship between highly-susceptible constraints and firm bribery payments, as well as for the relationship between firm bribery payments and export intensity. Analysis provided mixed results on the hypotheses regarding the moderating role of less-susceptible constraint