Graft and business in emerging economies: An ecological perspective

In this study we examine how a firm's engagement in graft in emerging economies is shaped by its organizational attributes. Building on the logic of organizational ecology, we envisage that a firm's engagement in graft is influenced by its (1) institutional structure (e.g., public ownership, foreign ownership, and government ownership), (2) market orientation (foreign vs. local market), and (3) firm capabilities (e.g., capacity utilization, product quality, and leadership quality). Using the World Bank's data, we analyzed 1782 firms in China, Brazil, Russia, Poland and South Africa, and found general support for our argument. The results suggest that a firm's engagement in graft is, at least in part, an organizational phenomenon influenced by the firm's founding conditions, required legitimization in the market, and capability conditions.