Nam Center Colloquium Series | Threat of Falling High Status and Corporate Bribery: Evidence from the Revealed Accounting Records of Two South Korean Presidents

Co-sponsored by the University of Michigan Ross School of Business

Social status and its dynamics may be an important predictor of which firms will engage in large-scale bribery. Prior theory is incomplete, however, and prior empirical studies have lacked comprehensive and reliable data on firm-level bribery decisions. We offer a new theoretical prediction and a novel data set on high-level corruption in South Korea, where the accounting records of two presidents in the 1987–1992 era were exposed to after-the-fact legal and public scrutiny. We find that, controlling for a range of alternative explanations, the threat of falling high status—that is, the combination of longstanding high social status with current-period mediocre economic performance relative to that of industry peers—is a significant predictor of increases in the amount of large-scale corporate bribery.

Jordan Siegel is an Associate Professor of Strategy and Michael R. and Mary Kay Hallman Faculty Fellow at the University of Michigan Ross School of Business. Professor Siegel is also a Research Fellow at the William Davidson Institute and an Associate-in-Research at the Harvard Korea Institute of the Harvard Asia Center.

Professor Siegel specializes in the study of how companies gain competitive advantage through their global strategy. Professor Siegel finds that there are numerous opportunities for companies to attain superior sustainable corporate performance through creative strategies for corporate governance and human resource management.