Bribery and Firm Performance in Different Institutional Environments

How does bribery affect firm performance? Is this effect uniform across different institutional set-ups? We utilize a firm-level dataset of 27 transition economies to examine the effect of bribery on firm performance. We find that although bribery helps firm performance by acting like grease in relatively underdeveloped institutional environments, this positive effect of bribery on firm performance decreases for firms operating within more advanced institutional contexts.