The Ability and Willingness of Family Firms to Bribe: A Socioemotional Wealth Perspective

Abstract

Extant research concludes that family firms are less likely to bribe due to reputation concerns. However, such conclusions are, to a certain extent, inconsistent with the intuition and observation that some family firms can be aggressive bribers. This study employs a restricted-extended framework of socioemotional wealth model to reconcile this inconsistency. We propose family management, on the one hand, results in reputation preservation willingness; while on the other hand, results in an abuse of trust between family members and superior ability to hide bribery secrets. Integrating the willingness and ability mechanisms leads to an inverted U-shaped relationship between family management and bribery. Further, family firm political connection and province-level anti-corruption investigation play moderation role on the inverted U-shaped main effect. An empirical analysis of Chinese listed firms from 2006 to 2017 supports our hypotheses.