The supply-side of corruption: a review of scenario, causes and prevention measure

Published date07 September 2021
Date07 September 2021
Subject MatterAccounting & finance,Financial risk/company failure,Financial crime
AuthorNurfarizan Mazhani Mahmud,Intan Salwani Mohamed,Roshayani Arshad
The supply-side of corruption:
a review of scenario, causes and
prevention measure
Nurfarizan Mazhani Mahmud
Faculty of Accountancy, Universiti Teknologi MARA, Kampus Tapah,
Perak Malaysia, and
Intan Salwani Mohamed and Roshayani Arshad
Accounting Research Institute, Universiti Teknologi MARA, Shah Alam, Malaysia
Purpose This paper aims to provide a proper understanding of corruption in the private sector, also
known as the supply-side of corruption. It also presentsthe causes of corrupt practices and points out the
corporationsactionsto mitigate corrupt behaviour in the business environment.
Design/methodology/approach This study reviews the prior literature on the phenomenon of
corruptionin the private sector, its causes and the preventive measures that should be implemented.
Findings Corruption in the private sector was associatedwith a f‌irms interaction with the public sector,
and the most common corruption in the private sectoris grand corruption, which is improper contribution
made to high-level public off‌icials and politicians. The causes of corruption in the private sector can be
explained from several dimensions:economy, psychosocial and legal and regulation. Preventative measures
encompass both internalstrategies, which are endogenous to business and external strategieslike exogenous
legislationand restrictions enforced by the government or outsideorganizations.
Originality/value The eff‌icient strategies in combating corruption need active cooperation and
participation from the supply-side of corruption. Thus, this study contributes to the literature on the
theoretical understanding of the corruption problem from the supply-side and responsibility play by the
privatesector in global anti-corruption initiatives.
Keywords Private sector, Supply-side corruption, Anti-corruption policies, Corporate governance
Paper type Viewpoint
Corruption is the main problem in many countries and becomes a severe economic, social,
political and moral crisis that negatively impacts societies and companies. Corruption is
def‌ined as misused public power for private gain (World Bank, 1997), a widely accepted
def‌inition. Such a description can only occur in the public sector and did not encompass
private-sector corruption (Gutmann and Lucas, 2018;Sartor and Beamish, 2019). Previous
studies (Na et al., 2018;Sikkaand Lehman, 2015;Stevulak and Campbell, 2008) suggest that
corruption is a vast sector that builds demand and supply. The exchange of corrupt
transactions results from an agreement between the briber (supply) and the bribed
(demand), which might be seen as a bargain, on whether the corrupt transaction should
occur and under which conditions (Picci, 2018). The demand-side usually refers to those in
The research is funded by Universiti Teknologi MARA, Malaysia; and the Ministry of Higher
Education Malaysia. It is also supported by Accounting Research Institute (ARI), Universiti
Teknologi MARA, Malaysia.
Journalof Financial Crime
Vol.29 No. 1, 2022
pp. 34-44
© Emerald Publishing Limited
DOI 10.1108/JFC-06-2021-0120
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