FIRM CHARACTERISTICS, CORRUPTION CONTROL AND MORAL HAZARD RELATED BEHAVIOR: A CROSS-COUNTRY PERSPECTIVE FROM DEVELOPING ECONOMIES
FIRM CHARACTERISTICS, CORRUPTION CONTROL AND MORAL HAZARD RELATED BEHAVIOR: A CROSS-COUNTRY PERSPECTIVE FROM DEVELOPING ECONOMIES

Summary/Abstract: Corruption is one of the substantial issues in the developing economies, where many of them severely suffer from. In that respect the topic is much worth investigating especially for the fastest growing developing economies, BRIC and Turkey. The major studies on corruption is mostly conducted on country level, however this paper claims to shed light on corruption on a broad based firm level by probing the link between firm characteristics, corruption control and moral hazard related behaviour for 466 non-financial firms belong to related economies between the years 2005 and 2014. Empirical findings indicate that firm characteristics tend to mitigate managerial extravagance which is used as an empirical determinant of moral hazard related behavior. From the industry level, the overall country average for all industries, reveal the inverse relationship between corruption control and discretionary expenditures as the level of corruption control increases while the discretionary expenditures decreasesCorruption is one of the substantial issues in the developing economies, where many of them severely suffer from. In that respect the topic is much worth investigating especially for the fastest growing developing economies, BRIC and Turkey. The major studies on corruption is mostly conducted on country level, however this paper claims to shed light on corruption on a broad based firm level by probing the link between firm characteristics, corruption control and moral hazard related behaviour for 466 non-financial firms belong to related economies between the years 2005 and 2014. Empirical findings indicate that firm characteristics tend to mitigate managerial extravagance which is used as an empirical determinant of moral hazard related behavior. From the industry level, the overall country average for all industries, reveal the inverse relationship between corruption control and discretionary expenditures as the level of corruption control increases while the discretionary expenditures decreases.Corruption is one of the substantial issues in the developing economies, where many of them severely suffer from. In that respect the topic is much worth investigating especially for the fastest growing developing economies, BRIC and Turkey. The major studies on corruption is mostly conducted on country level, however this paper claims to shed light on corruption on a broad based firm level by probing the link between firm characteristics, corruption control and moral hazard related behaviour for 466 non-financial firms belong to related economies between the years 2005 and 2014. Empirical findings indicate that firm characteristics tend to mitigate managerial extravagance which is used as an empirical determinant of moral hazard related behavior. From the industry level, the overall country average for all industries, reveal the inverse relationship between corruption control and discretionary expenditures as the level of corruption control increases while the discretionary expenditures decreases.

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