Political Corruption and Family Businesses: An Empirical Study of Bribery Payments in Tunisia

Abstract

This research examines the impact of family involvement in firms on their propensity to engage in corrupt practices, specifically through the payment of bribes to public officials or politicians. The influence of the weakness of the institutional context on this relationship was also tested. This framework was tested using data from 459 family firms in Tunisia that participated in the European Bank for Reconstruction and Development, the European Investment Bank and the World Bank Group Enterprise Survey conducted between September 2019 and July 2020. The results show mixed effects of family involvement on the propensity to pay bribes. While family ownership has a negative impact on political corruption, family involvement in management has a positive impact. Furthermore, in an environment where institutional frameworks are weak, strong family involvement in management seems to be associated with a lower propensity for political corruption.