The information used for this examination was gathered from peer-reviewed articles in research was performed to study corruption levels, triggers, consequences and perception in the United States and China. Findings The empirical research reviewed showed that, although there are many similarities on both cause and effect of corruption in both countries, there are far more differences. This is mainly due to the different cultures present in each country. Contribution The analysis made in this document is original since it compares the factors that contribute to corruption and what the effects of it are in two different countries with two very different cultures. This can contribute to the business world by showing how corruption is performed in these two countries and how it is perceived by their respective governments and citizens. INTRODUCTION In order to successfully conduct business in a foreign country, we must not only understand the ethical and legal surface of a country. In fact, it could be argued that it would be even more important to understand the unethical and illegal way of life that takes place
During Jeffrey Milyo’s research, he found that “Republican-connected firms realized positive abnormal returns after the 2000 presidential election, whereas Democrat-connected firms realized negative abnormal returns” (Milyo. 2014). One way politicians and corporations mutually benefit is when a politician has knowledge of inside government information that a corporation might be interested in knowing. “Politicians may profit from market-relevant inside information about public policy. Politicians confer policy favors to personal cronies in exchange for inside information and preferential business deals for themselves, their families, and their friends” (Milyo. 2014). U.S. state spending is affected by corruption as well, as expressed in the article “The Impact of Public Officials’ Corruption on the Size and Allocation of U.S. State Spending.” This article declares that “self-interested public officials are likely to design and manipulate government institutions to maximize budgets for their own private gain. Budgets of states with a higher degree of corruption will become larger. Corruption may distort public resource allocation because of rent-seeking behavior among related agents. When allocating public resources, corrupt officials favor sectors with greater rent, higher secrecy, and less competitiveness. Corrupt public officials are likely to spend public resources on items for which it is easier to levy larger bribes” (Liu, Mikesell. 2014). During the research performed to create this article, the authors surveyed several individuals to find their perception of corporate-government corruption and asked them which industry was more likely to engage in corrupt actions with the government. The result was that “the
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