Developing Country Firms and the Challenge of Corruption

Abstract

Corruption is an important topic for management scholars and practitioners. Given the rise to economic prominence of firms from developing countries, this paper investigates how developing country firms engage with this challenge. Based on a content analysis of 191 codes of conduct, issued by firms from 18 developing countries, we first investigate what anti-corruption commitments developing country firms make in their codes of conduct; we then determine contextual factors at national business system level that drive differences in firm engagement. We provide evidence for a ‘mirror view’ of corporate social responsibility, according to which companies match the quality of national-level institutions in their own anti-corruption commitments. This result stands in contrast to the basic expectation underlying the concept of corporate social responsibility that companies step in to close governance gaps and address wider societal-level challenges. Our findings thus highlight limitations to purely private governance mechanisms aimed at combatting corruption.