International anti-corruption regulations – governing the behavior of firms in a foreign country – seek to lower the supply side of bribes while allowing firms to redeploy those resources towards providing better products and services. This paper examines (1) the conditions under which international anti-bribery institutions are effective in combating bribery, and (2) whether innovative, but non-bribing firms can remain competitive in the product market. Using a simulation based model, I examine the behavior of bribing and non-bribing firms. The results indicate that the majority of the firms in the system must adhere to non-bribing to change the corruption landscape. Further, non-bribers face a competitive disadvantage in the product market – an effect most pronounced for highly innovative firms.
JANDHYALA, S. (2013). Effectiveness of International Anti-Corruption Regulations: A Simulation Model. In: 2013 Academy of Management Annual Meeting.