Business-government interactions during regulatory inspections: Evidence on gift-giving by foreign-invested firms in Viet Nam

Tóm tắt

This study examines the firm-level and home-country institutional factors associated with gift-giving during inspections among foreign-invested firms (FIFs) in Viet Nam. Using firm-level data from the Provincial Competitiveness Index (PCI) surveys conducted between 2016 and 2020, the paper investigates the determinants of this behavior, measured as a binary indicator of whether firms gave gifts to inspecting officials during annual inspections. Employing a logistic regression model, the analysis explores firm characteristics and home-country institutional factors associated with gift-giving during inspections. The study provides evidence that FIFs from OECD countries are less likely to engage in gift-giving during inspections, whereas FIFs with longer operating histories and those facing stronger informal payment norms exhibit a greater propensity for such behavior. Firms from home countries with higher CPI scores, indicating stronger institutional transparency at the country level, are also less likely to engage in gift-giving during inspections. The results highlight the importance of institutional quality and regulatory transparency in shaping business-government interactions. Our study contributes to the literature on investment climate and institutional economics by providing correlational evidence on the firm-level and institutional determinants of gift-giving during inspections. Policy implications emphasize the need to strengthen transparent regulatory frameworks, clarify acceptable interaction norms, and promote an investment environment that supports ethical and sustainable business practices.