Business' Attitudes Towards Corruption in Selected Central European Countries

Abstract

Purpose: Corruption is perceived as a widespread problem throughout the world, including in Central European countries. In terms of corruption, these countries still lag behind the leading EU countries (as indicated by the 2023 Worldwide Governance Indicators). As corruption itself is very difficult to measure, the perception of corruption is often used as a proxy. The aim of this paper is to analyse attitudes towards corruption in selected Central European countries and to draw conclusions on the factors influencing these perceptions. Based on the assumption that the difference between de jure and de facto transparency matters, we selected Czechia, Hungary, and Poland as countries with small differences between these two dimensions of transparency, and Croatia, Slovakia, and Slovenia as countries with large differences. Design/Methodology/Approach: Using Eurobarometer data, we applied logistic regression to analyse attitudes towards corruption in the two groups of countries distinguished by differences in de jure and de facto transparency. Each group, consisting of three Central European countries, was used to create a model, i.e., Model 1 and Model 2, with a total number of observations of 901 and 902, respectively. Both models displayed adequate fit indices and enabled predictions that allowed us to draw conclusions. All respondents were business representatives with decision-making responsibilities in their companies, ensuring that the results reflect company perceptions rather than those of the general public. Findings: Attitudes towards corruption in the countries studied are related to perceptions of patronage and nepotism in business, perceptions of corruption in public procurement, perceived links between politics and business, and attitudes towards tax rates. In the group where there is little difference between de jure and de facto transparency levels, business attitudes towards corruption are also associated with perceptions of adequacy of infrastructure and complexity of administrative procedures. In the countries where these differences are substantial, attitudes towards corruption are related to perceptions of problems arising from frequent changes in the law, problems with debt collection, and differences in views regarding the severity of bribery depending on the value of the bribe. Academic contribution to the field: This research provides a better understanding of the factors influencing the perception of corruption in Central European countries from a business perspective. In doing so, it introduces a methodology that is well-suited for the analysis of survey-collected data, especially since it allows the dependent variable to be categorical. Moreover, by using data from the Transparency Index to differentiate countries, the study has the potential to stimulate further theoretical and empirical research into the relationship between corruption and transparency. Lastly, by linking companies' perceived problems to overall perceptions of corruption, this paper helps to identify the areas within the studied countries where pockets of corruption are most likely to exist. Originality/Value: Previous research has found that corruption tends to occur when the gap between de facto and de jure transparency is larger. This research demonstrates that the size of this gap can also be successfully used to achieve a better understanding of the factors influencing attitudes towards corruption. Therefore, this paper employs the difference between de jure and de facto transparency as a categorisation criterion to analyse the factors influencing the perception of corruption. This categorisation approach enabled the development of two separate logistic regression models with high predictive power.