Corruption and Political Strategies: only suspected or actually corrupt?


  • CDAE

Área de conhecimento: 

  • Estratégia Empresarial


  • André Leonardo Pruner da Silva




Corporate Political Activity (CPA) is the research agenda that investigates the firms’ behavior in the nonmarket environment in order to influence decisions and public policies for their own benefit. We argue that firms pursue a combination of legal and illegal nonmarket strategies. Our empirical design is based on the theory of crime and nonmarket strategy theory. We developed an identification strategy using an institutional change in the legislation to combat corruption, as an exogenous shock in a diff-in-diff estimation. We tested two CPA mechanisms: donation to election campaigns and the hiring of employees with political experience. Our empirical results support that firms engaged in Corporate Political Activity also explore corruption to achieve government preferential treatment. We also build a laboratory experiment to deepen our analysis at the individual level. This controlled environment allowed us to understand how increasing punishment affects the decision-making of both firm managers and the Political Agent. In line with our identification strategy in the natural experiment, we found empirical evidence to support our main results that the difference in the preferential treatment is corruption.

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