Are state-owned companies more exposed to corruption risk? : a comparative study of the largest state-owned and private companies in Norway
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Recent corruption scandals have called attention to state-owned companies’ involvement in corruption. The purpose of this study is to explore whether there are in fact differences between state-owned and private companies’ exposure to corruption risk. The perceived level of corruption in a market can be viewed as an important determinant for participating in corruption (Rose-Ackerman, 1975; 1998). Similarly, a sound corporate culture can reduce companies’ corruption risk, even for companies operating in high-risk markets (Keig et al., 2015). Although corporate culture is difficult to measure, increased disclosure of information can suggest companies’ ethical behaviour. This thesis consists of a literature review and an empirical study on companies’ exposure to corruption risk and transparency. We selected ten of the largest state-owned and private companies in Norway for a qualitative comparison. The twenty companies were selected based on four requirements; listed on Oslo Stock Exchange, headquartered in Norway, significant operations abroad, as well as not being categorised as a holding company. Because the companies operate under the same home-country legislation, we have no assumption about systematic differences between the companies' performance in the analysis. Our main findings, however, demonstrate that there are differences between the two groups related to both exposure to corruption risk, and transparency. In light of the literature review and the state ownership policy, we identified characteristics of the state as an owner that could influence corporate decision-making. By looking at exposure to corruption risk and transparency separately, we were able to determine how state ownership can explain some of the observed differences between the two groups. We document that the state-owned companies are more exposed to corruption risk. Nonetheless, they disclose more information on their anti-corruption initiatives and corporate governance. However, on the basis of these results, we are unable to conclude the firms’ ethical behaviour.