Combatting corruption through collective action : circumstances that make a company take part in collective action agreements

Many international firms and local companies are operating in markets that are exposed to\ncorruption. Corruption increases the cost of doing business and has harmful consequences on\nthe society. Multinational corporations publish compliance and anti-corruption declaration on\ntheir home pages, where they claim they resist demands for bribes. Firms can go beyond legal\ncompliance and corporations can take a more active role in the prevention of corruption. This\nthesis studies collective action as an anti-corruption tool and identifies circumstances where it\nis more likely that a company will be part of collective action agreements.\nWe find that a deterioration in the business environment works as a trigger for companies to\njoin collective action. Further, we find that a facilitator has a positive influence and that\nmultinational enterprises are more active in initiating collective actions than smaller\ncompanies. To find these circumstances, we use literature on collective action, theories and\nresearch on cartels and Hirschman’s exit, voice and loyalty framework to develop hypotheses.\nWe then compare these hypotheses to cases where collective action is used to fight corruption.\nOur findings highlight that companies need a long-term perspective, not just in words and\ngood intentions but in evaluations that lead to bonus payments. A further implication of our\nstudy is that the companies’ moral responsibility exceeds the legal responsibility. It is\nimportant that MNEs are made aware of collective action as a tool that can be used against\ncorruption. Our findings indicate that facilitators can have an important role in initiating\ncollective action in industries with small companies.