Bribery, local network, and local performance among multinational corporations: a moderated mediation model of informal competition

Purpose This study investigated the effects of bribery and local performance within the framework of social network theory. It also explored the relationship between bribery and local performance mediated by local networks. Furthermore, we examined the moderated mediating effect of informal competition on the relationship between bribery, local access, and local performance. Design/methodology/approach Data were extracted from the “Investigation on Overseas Investment Business Operation Status,” provided by the Investment Commission of the Ministry of Economic Affairs in Taiwan. To test the five hypotheses, we collected panel data for 4,661 observations of MNCs from 2013–2018 for panel data analysis. Findings The findings suggest that bribery positively affects local performance. The results also indicate that local networks mediate the relationship between bribery and local performance. Additionally, informal competition strengthens the indirect relationships among bribery, local networks, and local performance. Originality/value This study contributes to bribery research from the perspective of relational embeddedness and network ties by expanding the understanding of local networks as mediators in the relationship between bribery and local performance. Moreover, we highlight the moderated mediating role of informal competition, based on the perspective that relational embeddedness can mitigate conflicts arising from informal institutions.