Title

Regulation and corporate corruption : new evidence from the telecom sector

Document Type

Journal article

Source Publication

Journal of Comparative Economics

Publication Date

2-1-2012

Volume

40

Issue

1

First Page

22

Last Page

43

Keywords

Telecommunications, Regulation, Corruption

Abstract

This paper examines how government regulation in developing countries affects the form of corruption between business customers and service providers in the telecom sector. We match the World Bank enterprise-level data on bribes with a unique cross-country telecom regulation dataset collected by Wallsten et al. (2004), finding that (1) strong regulatory substance (the content of regulation) and regulatory governance reduce corruption; (2) competition and privatization reduces corruption; (3) the effects of regulatory substance on corruption control are stronger in countries with state-owned or partially state-owned telecoms, greater competition, and higher telecommunication fees; and (4) bureaucratic quality exert substitution effects to regulatory substance in deterring corruption. Overall, our results suggest that regulatory strategies that reduce information asymmetry and increase accountability tend to reduce illegal side-payments for connections.

DOI

10.1016/j.jce.2011.12.001

Print ISSN

01475967

E-ISSN

10957227

Publisher Statement

Copyright © 2011 Association for Comparative Economic Studies Published by Elsevier Inc.

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Recommended Citation

Berg, S. V., Jiang, L., & Lin, C. (2012). Regulation and corporate corruption: New evidence from the telecom sector. Journal of Comparative Economics, 40(1), 22-43. doi: 10.1016/j.jce.2011.12.001