How bribery undermines the productivity gains of exporting: the role of institutional trust

We explore how bribing at home affects a firm’s ability to appropriate value from exporting. We argue that bribery diverts resources and managerial attention away from assimilating knowledge from foreign markets, thereby undermining productivity gains from exporting. This constraint is particularly pronounced when low institutional trust makes interactions with public officials more uncertain and unpredictable. Using comprehensive data from 22 Sub-Saharan African countries, our analyses show that exporting raises productivity only for firms that abstain from bribing, and that the negative moderating effect of bribery is strongest in countries with low institutional trust. These findings highlight bribery and institutional trust as critical boundary conditions for how firms can appropriate value from exporting. Our study contributes to international business and corruption research and raises new questions about how firms and policymakers can reduce reliance on bribery to unlock the developmental potential of trade.