Title: The relationship between corrupt practices and organisational performance: an empirical investigation

Authors: Anastasia A. Katou

Addresses: Department of Business Administration, University of Macedonia, 156 Egnatia Street, Thessaloniki, 540 06, Greece

Abstract: Research into corruption has received considerable attention over the last decade. However, because it is remarkably difficult to collect data in this area, empirical studies have provided mixed results about the influence of corrupt practices on organisational performance. The purpose of this study is to examine and identify a cause-and-effect relationship between corruption and performance. The analysis is based on structural equation modelling and bootstrapping estimation using a sample across the manufacturing, services and trade sectors in Greece. The study finds that there is a positive, bi-directional influence between corrupt practices of employees and corrupt business practices. Furthermore, the study finds that the negative impact of corrupt business practices on organisational performance is three times stronger than the impact of corrupt practices of employees. Finally, the study reveals that corrupt practices are influenced by the characteristics of both employees and organisations.

Keywords: corrupt practices; corrupt employees; corrupt business practices; organisational performance; bi-directional influence; corruption; structural equation modelling; SEM; bootstrapping estimation; manufacturing industry; services industry; trade sector; Greece.

DOI: 10.1504/IJBGE.2013.059162

International Journal of Business Governance and Ethics, 2013 Vol.8 No.4, pp.323 - 347

Received: 22 Jun 2013
Accepted: 08 Oct 2013

Published online: 05 Feb 2014 *

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