Returnee Executives, Institutional Environment, and Enterprise Bribery

Abstract Returnee executives have been found to be able to predict a variety of strategic actions effectively; however, less attention has been given to how these executives influence nonmarket strategic actions, especially bribery. We integrate upper echelons theory and institutional theory to examine whether and when returnee executives influence enterprise bribery. We argue that returnee executives may develop moral relativism, which makes them more likely to view bribery as an ethical means of competition. This, in turn, increases the extent to which enterprises engage in bribery. In addition, we argue that anticorruption initiatives (formal institutions) and Confucian culture (informal institutions) moderate the above relationships. The empirical discussion of data from 2,241 nonstate-owned listed companies in China confirms most of the above theoretical speculations. This study helps us recognize the dark side of returnee executives in emerging economies.