The Contradictory Role of Corruption in Corporate Innovation Strategies
PDF (Русский)
PDF

Keywords

Russia
SMEs
top-level management experience
corruption
bureaucracy

How to Cite

OkrahJ., & NeppA. (2022). The Contradictory Role of Corruption in Corporate Innovation Strategies. Foresight and STI Governance, 16(3), 83-94. https://doi.org/10.17323/2500-2597.2022.3.83.94

Abstract

This study considers the influence of the work experience of Russian top managers on the willingness to stimulate innovative processes in companies, including using at a certain stage some corruption schemes to bypass bureaucratic barriers.Using a logit model based on enterprise surveys carried out by the World Bank, data on managers of small and medium-sized businesses were analyzed.It was revealed that the presence of "corruption competencies" has a positive effect on the innovative activity of enterprises in developing countries. This effect is due to the fact that corruption in such countries acts as a mechanism to reduce transaction costs associated with innovation. The level of corrupt activity of managers increases as they accumulate experience due to the high degree of bureaucratization and the weakness of institutions, which turn into time and financial costs for enterprises. In the short term, corruption can accelerate the development of innovation, but cannot serve as a permanent tool in this regard, since its long-term consequences turn out to be extremely negative.

https://doi.org/10.17323/2500-2597.2022.3.83.94
PDF (Русский)
PDF

References

Aghion P., Blundell R., Griffith R., Howitt P., Prantl S. (2009) The effects of entry on incumbent innovation and productivity. The Review of Economics and Statistics, 91(1), 20-32. DOI: https://doi.org/10.1162/rest.91.1.20

Amabile T. M. (1996) Creativity and innovation in organizations (Harvard Business School Background Note 396-239), Cambridge, MA: Harvard University Press. https://www.hbs.edu/faculty/Pages/item.aspx?num=13672, дата обращения 12.03.2022.

Anokhin S., Schulze W.S. (2009) Entrepreneurship, innovation, and corruption. Journal of Business Venturing, 24(5), 465-476. DOI: https://doi.org/10.1016/j.jbusvent.2008.06.001

Barasa L. (2018) Corruption, transaction costs, and innovation in Africa. African Journal of Science, Technology, Innovation and Development, 10(7), 811-821. DOI: https://doi.org/10.1080/20421338.2018.1519061

Cannella B., Finkelstein S., Hambrick D. (2009) Strategic leadership: Theory and research on executives, top management teams, and boards, Oxford: Oxford Ubiversity Press.

Carney M., Zhao J., Zhu L. (2019) Lean innovation: Family firm succession and patenting strategy in a dynamic institutional landscape. Journal of Family Business Strategy, 10(4), 100247. DOI: https://doi.org/10.1016/j.jfbs.2018.03.002

Coase R. (1937) The nature of the firm. Economica, 4(16), 386-405.

Coase R. (1992) The institutional structure of production. American Economic Review, 82(4), 713-719. https://www.jstor.org/stable/2117340.

Corojan A., Criado J.I. (2012) E-government for transparency, anti-corruption, and accountability: Challenges and opportunities for Central American countries. In: Handbook of research on e-government in emerging economies: Adoption, e-participation, and legal frameworks (eds. K.J. Bwalya, S.F.C. Zulu), Hershey, PA: IGI Global, pp. 328-350.

Cuijpers M., Guenter H., Hussinger K. (2011) Costs and benefits of inter-departmental innovation collaboration. Research Policy, 40(4), 565-575. DOI: https://doi.org/10.1016/j.respol.2010.12.004

Dreher A., Gassebner M. (2013) Greasing the wheels? The impact of regulations and corruption on firm entry. Public Choice, 155(3), 413-432. DOI: https://doi.org/10.1007/s11127-011-9871-2

Fischer B., Tello-Gamarra J. (2017) Institutional quality as a driver of efficiency in laggard innovation systems. Journal of Globalization, Competitiveness & Governability / Revista de Globalización, Competitividad y Gobernabilidad/Revista de Globalização, Competitividade e Governabilidade, 11(1), 129-144. DOI: https://doi.org/10.3232/GCG.2017.V11.N1.06

Guriev S. (2004) Red tape and corruption. Journal of Development Economics, 73(2), 489-504. DOI: https://doi.org/10.1016/j.jdeveco.2003.06.001

Hambrick D.C., Mason P.A. (1984) Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193-206. DOI: https://doi.org/10.2307/258434

Hitt M.A., Collins J.D. (2007) Business ethics, strategic decision making, and firm performance. Business Horizons, 50(5), 353-357. DOI: https://doi.org/10.1016/j.bushor.2007.04.004

Hoskisson R.E., Hitt M. (1988) Strategic control systems and relative R&D investment in large multiproduct firms. Strategic Management Journal, 9(6) 605-621. DOI: https://doi.org/10.1002/smj.4250090607

Huber E., Ragin C., Stephens J.D. (1993) Social democracy, Christian democracy, constitutional structure, and the welfare state. American Journal of Sociology, 99(3), 711-749. DOI: https://doi.org/10.1086/230321

Iorio R., Segnana M.L. (2022) Is paying bribes worthwhile? Corruption and innovation in middle-income countries. Eurasian Business Review (in press). DOI: https://doi.org/10.1007/s40821-022-00205-4

Kearney R.C., Feldman B.M., Scavo C.P.F. (2000) Reinventing government: City manager attitudes and actions. Public Administration Review, 60(6), 535-548. https://www.jstor.org/stable/977436.

Krammer S. (2019) Greasing the wheels of change: Bribery, institutions, and new product introductions in emerging markets. Journal of Management, 45(5), 1889-1926. https://doi.org/10.1177%2F0149206317736588.

Kurniawan R., Sukma A., Hariandja E.S. (2016) Strategy of Product Development and Process of Creative Industries in Indonesia. In: Proceedings of the 2016 Global Conference on Business, Management and Entrepreneurship (eds. A.G. Abdullah, R. Nandiyanto, L. Adiwibowo, T. Aryanti, V. Adriany, A. Aripin), Dordrecht, Paris, Zhengzhou: Atlantis Press, pp. 194-200. DOI: https://doi.org/10.2991/gcbme-16.2016.36

Langner B., Seidel V.P. (2015) Sustaining the Flow of External Ideas: The Role of Dual Social Identity across Communities and Organizations. Journal of Product Innovation Management, 32(4), 522-538. DOI: https://doi.org/10.1111/jpim.12216

Lau C.-M. (2011) Team and organizational resources, strategic orientations, and firm performance in a transitional economy. Journal of Business Research, 64(12), 1344-1351. DOI: https://doi.org/10.1016/j.jbusres.2011.01.001

Martin K.D., Cullen J.B., Johnson J.L., Parboteeah K.P. (2007) Deciding to bribe: A cross-level analysis of firm and home country influences on bribery activity. Academy of Management Journal, 50(6), 1401-1422. https://www.jstor.org/stable/20159481.

Minichilli A., Corbetta G., MacMillan I.C. (2010) Top management teams in family-controlled companies: ‘familiness',‘faultlines', and their impact on financial performance. Journal of Management Studies, 47(2), 205-222. DOI: https://doi.org/10.1111/j.1467-6486.2009.00888.x

Mom T., Fourné S., Jansen J. (2015) Managers' work experience, ambidexterity, and performance: The contingency role of the work context. Human Resource Management, 54(S1), s133-s153. DOI: https://doi.org/10.1002/hrm.21663

Mrad F., Bouaziz N. (2018) Les effets de la qualité des institutions sur l'innovation. Innovations, 3, 137-164.

Méon P.-G., Weill L. (2010) Is Corruption an Efficient Grease? World Development, 38(3), 244-259. DOI: https://doi.org/10.1016/j.worlddev.2009.06.004

Nitsevich V.F., Stroev V.V., Moiseev V.V., Sudorgin O.A. (2020) Actual Problems of Investments in Russia. In: Smart Technologies and Innovations in Design for Control of Technological Processes and Objects: Economy and Production. FarEastСon 2018 (ed. D. Solovev), Heidelber, Dordrecht, London, New York: Springer. DOI: https://doi.org/10.1007/978-3-030-15577-3_66

North D.C. (1992) Transaction costs, institutions, and economic performance, San Francisco, CA: Ics Press.

Ollila S., Yström A. (2016) An investigation into the roles of open innovation collaboration managers. R&D Management, 47(2), 236-252. DOI: https://doi.org/10.1111/radm.12197

Osburg J. (2018) Making business personal: Corruption, anti-corruption, and elite networks in post-Mao China. Current Anthropology, 59(S18), S149-S159. DOI: https://doi.org/10.1086/695831

Parkin M. (2016) Opportunity cost: A reexamination. The Journal of Economic Education, 47(1), 12-22. DOI: https://doi.org/10.1080/00220485.2015.1106361

Peng J., Zhang G., Fu Z. et al. (2014) An empirical investigation on organizational innovation and individual creativity. Information Systems and e-Business Management, 12(3), 465-489. DOI: https://doi.org/10.1007/s10257-013-0227-y

Perry-Smith J. E., Mannucci P. V. (2017) From creativity to innovation: The social network drivers of the four phases of the idea journey. Academy of Management Review, 42(1), 53-79. DOI: https://doi.org/10.5465/amr.2014.0462

Riaz M.F., Cantner U. (2020) Revisiting the relationship between corruption and innovation in developing and emerging economies. Crime, Law and Social Change, 73(4), 395-416. DOI: https://doi.org/10.1007/s10611-019-09867-0

Shrivastava U., Bhattacherjee A. (2015) ICT as a corruption deterrent: A research note. Paper presented at the Seventh International Conference on Information and Communication Technologies and Development. DOI: https://doi.org/10.1145/2737856.2737864

Sirotkina N., Pavlovskaya S. (2018) Рublic procurement in Russia: What hinders innovation? International Journal of Public Administration, 41(5-6), 435-445. DOI: https://doi.org/10.1080/01900692.2018.1426009

Wang Y., You J. (2012) Corruption and firm growth: Evidence from China. China Economic Review, 23(2), 415-433. DOI: https://doi.org/10.1016/j.chieco.2012.03.003

Woodside A.G., Bernal P.M., Coduras A. (2016) The general theory of culture, entrepreneurship, innovation, and quality-of-life: Comparing nurturing versus thwarting enterprise start-ups in BRIC, Denmark, Germany, and the United States. Industrial Marketing Management, 53, 136-159. DOI: https://doi.org/10.1016/j.indmarman.2015.11.003

Xiao Y., Lenzen M., Benoît-Norris C., Norris G.A., Murray J., Malik A. (2018) The corruption footprints of nations. Journal of Industrial Ecology, 22(1), 68-78. DOI: https://doi.org/10.1111/jiec.12537

Xie K., Song Y., Zhang W., Hao J., Liu Z., Chen Y. (2018) Technological entrepreneurship in science parks: A case study of Wuhan Donghu High-Tech Zone. Technological Forecasting and Social Change, 135, 156-168. DOI: https://doi.org/10.1016/j.techfore.2018.01.021

Yin X., Hai B., Chen J. (2019) Financial constraints and R&D investment: The moderating role of CEO characteristics. Sustainability, 11(15), 4153. DOI: https://doi.org/10.3390/su11154153

Zahra S.A., Priem R.L., Rasheed A.A. (2005) The antecedents and consequences of top management fraud. Journal of Management, 31(6), 803-828. https://doi.org/10.1177%2F0149206305279598.

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Downloads

Download data is not yet available.