Local Gambling Culture and Enterprise Bribery: A Social Norms Theory Perspective

Abstract

Based on social norms theory, we examine the impact of local gambling culture, an unexpected result of government-permitted lotteries, on enterprise bribery. We propose that local gambling cultures can promote active enterprise involvement in bribery activities by reinforcing the speculative psychology of enterprise decision-makers. In addition, we argue that local gambling culture is less likely to lead female (returnee) chairpersons to develop speculative psychology than male (nonreturnee) chairpersons. This, in turn, allows female (returnee) chairpersons to undermine the positive impact of local gambling culture on involvement in enterprise bribery. Based on 11 years of empirical data obtained from privately listed Chinese companies (including 2,637 listed companies with 15,036 firm-year data points), we obtain empirical evidence to support most of these views. This study is the first to explore the relationship between local gambling culture and enterprise bribery, and important insights are provided for shareholders and policy-makers to better curb enterprise bribery.