Does ICT development curb firms' perceived corruption pressure? The contingent impact of institutional qualities and competitive conditions

Abstract

This study aims to investigate how Information & Communication Technology (ICT) development can contribute to a reduction in firms' perceived corruption pressure. Based on survey data of 39,796 firms from 76 countries spanning 2007 to 2016, we demonstrate that ICT development can significantly curb the firm-level prevalence of illegal payments to regulatory officials. We also find that the relationship between ICT development and perceived corruption pressure is a function of various aspects of institutional and competitive environments: its impact is strengthened when institutional quality (i.e., checks and balances, and the protection of private property rights) is higher, whereas it is weakened when competitive conditions (i.e., liability of foreignness, and informal competition) are against firms. Implications for theory and policy are also discussed.