Globalisation and corruption

When a country interacts with foreign countries, it exposes itself to foreign culture and behaviour. This exposure could in‡uence the domestic culture through imitation or adaptation in the same way as individuals tend to be in‡uenced in their behaviour by the groups that they frequent. This could carry over to business culture in general and the corruption culture speci…cally. Therefore, the main hypothesis in this paper is that as a country participates in the global market the corruption culture in the foreign countries with which it interacts a¤ects the domestic corruption culture. In the theoretical model developed to test the main hypothesis, we put forth two assumptions. The …rst is that as the level of exposure to a foreign country increases its in‡uence on the domestic corruption culture increases. The second is that the greater the di¤erence between the foreign and the domestic corruption culture the greater is the impact on the domestic corruption culture. The empirical testing of the dynamic model developed validates the claim that interaction with foreign countries has an in‡uence on the domestic level of corruption. The magnitude is dependent on the level of corruption, as well as the degree of exposure to the foreign countries.