May 31, 2011
from 05:00 PM to 06:00 PM
|Where||Winstanley Lecture Theatre, Trinity College|
|Contact Name||Sheryl Anderson|
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Prof Raghavendra Rau
Title: 'Which Firms benefit from Bribes and How Much? Evidence from corruption cases worldwide'
We analyze a hand-collected sample of 166 prominent bribery cases, involving 107 publicly listed firms from 20 stock markets that have been reported to have bribed government officials in 52 countries worldwide during 1971-2007. We focus on the initial date of award of the contract for which the bribe was paid (rather than of the revelation of the bribery) and compare the bribing firms with a matched sample of competitors that have not been involved in bribery incidents. Our data enable us to describe in detail the mechanisms through which bribes affect firm value. We find that firms that win contracts by paying bribes under-perform their peers for up to three years before and after winning the contract for which the bribe was paid. Firm performance, the rank of the politicians bribed, as well as bribe-paying and bribe-taking country characteristics affect the magnitude of the bribes and the benefits that firms derive from them.