Monopoly Money: Foreign Investment and Bribery in Vietnam, a Survey Experiment

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2015-02

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Abstract

©2014, Midwest Political Science Association. Prevailing work argues that foreign investment reduces corruption, either by competing down monopoly rents or diffusing best practices of corporate governance. We argue that the mechanisms generating this relationship are not clear because the extant empirical work is too heavily drawn from aggregations of total foreign investment entering an economy. Alternatively, we suggest that openness to foreign investment has differential effects on corruption even within the same country and under the same domestic institutions over time. We argue that foreign firms use bribes to enter protected industries in search of rents, and therefore we expect variation in bribe propensity across sectors according to expected profitability. We test this effect using a list experiment embedded in three waves of a nationally representative survey of 20,000 foreign and domestic businesses in Vietnam, finding that the effect of economic openness on the probability to engage in bribes is conditional on policies that restrict investment.

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10.1111/ajps.12126

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Malesky, EJ, DD Gueorguiev and NM Jensen (2015). Monopoly Money: Foreign Investment and Bribery in Vietnam, a Survey Experiment. American Journal of Political Science, 59(2). pp. 419–439. 10.1111/ajps.12126 Retrieved from https://hdl.handle.net/10161/17733.

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Scholars@Duke

Malesky

Edmund Malesky

Professor of Political Science

Malesky is a specialist on Southeast Asia, particularly Vietnam. Currently, Malesky's research agenda is very much at the intersection of Comparative and International Political Economy, falling into three major categories: 1) Authoritarian political institutions and their consequences; 2) The political influence of foreign direct investment and multinational corporations; and 3) Political institutions, private business development, and formalization.


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