There has been a significant increase in the number of academic studies published on the relationship between corruption and innovation in recent years. Various relationships have been conceptualized, including the “sand” and “grease” perspectives which propose that corruption reduces and increases innovation, respectively. In light of interest in the topic showing growing momentum, we review the literature on corruption and innovation for the purpose of reconciling these proposed theoretical perspectives. Following a systematic literature review methodology, we explain the composition of the literature and map the key conceptualizations of the corruption-innovation relationship. We link the variables, measures, and theories employed in the literature to proposed conceptual relationships. Furthermore, we outline the key patterns in which the sanding or greasing impact is more likely to be observed. Based on the systematic review, we propose a research agenda for corruption-innovation research and discuss policy implications.

Scarcity of skilled workers in the emerging markets is considered a severe challenge facing organizations since it limits the quality and depth of their labour force. We explore an understudied problem associated with skilled worker scarcity, its impact on a firm's adherence to the law. Drawing on the lens of anomie theory, we hypothesize that a skilled workforce positively impacts a firm's law-abiding organizational climate. This is due both to ethical values associated with the education of skilled workers and their positive impact on an organization's ability to adapt to its environment. Furthermore, we explain the impact that managerial ties have on this relationship, hypothesizing how ties with industry firms and ties with government influence a firm's adherence to law-abiding norms. Hypotheses were tested with survey data collected from 150 Mexican companies. Our study contributes by shedding light on an understudied cause of the wide-spread illegality that plagues emerging markets.

In recent years, there has been an exponential increase in the amount of foreign investment by emerging market multinational enterprises (EMNEs). While it has been debated whether EMNEs strengthen or weaken the institutions in host countries they invest in, the literature has paid limited attention to how EMNE investment impacts corruption in other emerging markets, one of the most significant destinations of EMNEs. Following Hoskisson et al. (2013), we categorize two types of emerging markets as targets of EMNE investment, a) low-income emerging markets and b) middle-income emerging markets, based on their institutional and market development. Building on the theory of firm-specific advantages (FSAs) and the institutional advantage (IA) of EMNEs, we reason that EMNEs enter foreign markets in accordance to where their skills and competencies can be effectively utilized, and this impacts corruption in the host country. We make two key arguments: (1) EMNEs predominantly use their IA in low-income emerging markets, which in the long term increases corruption in the host market, and (2) EMNEs predominantly use their FSAs to gain competitive advantage in middle-income emerging markets, which decreases corruption in the host market. Empirical analysis of Chinese outward FDI from the 2008-2018 period supports our hypotheses. Our research contributes to both the literature on EMNEs and corruption.

This chapter adopts an inductive qualitative approach to examine the case of Algerian entrepreneurs and their experience with corruption. In contexts marked by unstable institutions, corruption is often considered necessary for survival. We explore and expand on this line of reasoning through a discursive legitimation approach, relying on the work of Vaara et al. (2006) and Van Leeuwen (2007). We show that Algerian entrepreneurs adopt five legitimation strategies to justify engaging in corruption: moralization (value systems), rationalization (cognitive validity), normalization (common behaviors), authorization (authority of persons), and mythopoesis (use of narratives and stories). Thus, our chapter elucidates the mindset behind why entrepreneurs engage in corruption. We contribute to the understanding of corruption in three ways. First, we show that when corruption is embedded in an institutional environment, the decision to engage in corruption is beyond a black-and-white issue. Second, our study reveals the multifaceted interpretations of corruption by tracing the various justification discourses mobilized by entrepreneurs. Third, our chapter suggests that the multiple discursive justifications call for a broader approach to fighting corruption than what has conventionally been used.

In light of the social, economic, and environmental turmoil present in today’s world, capitalism is at the heart of fiery debates across many disciplines, including business, politics, and international development. While its proponents advocate for it as the mechanism that underlies the growth and sophistication of modern society, its detractors renounce it as a root cause of the growing inequality and environmental degradation in the world. Thus, the legitimacy of capitalism as an economic model capable of responding to the twenty-first century’s most pressing challenges is in serious question. The concept of conscious capitalism aims to legitimize capitalism by emphasizing its virtues that have the potential of fostering inclusive, equitable and sustainable social and economic development. While conscious capitalism continues to capture the attention of both academics and practitioners, we believe that it can be further legitimized, particularly in the Islamic context, by exploring its moral underpinnings from an Islamic perspective. To do so, we explore the compatibility of Islamic values with conscious capitalism. We conclude our chapter by suggesting that Islam and conscious capitalism offer complementary perspectives on business.

We investigate the effect of corruption on product, process, marketing, and organizational innovation in new ventures. Based on differences in the ability of firms to appropriate economic returns from these types of innovation, we argue that corruption undermines the formal property protection associated with product innovation, privileging the other kinds of innovation, which are less susceptible to the effects of corruption and thus provide more attractive returns. Furthermore, we argue for a differential impact of corruption on innovation for new ventures relative to incumbent firms. We find that corruption reduces product innovation, but increases process, marketing, and organizational innovation. The impact of corruption on the product innovation of new ventures is more severe relative to that of incumbent firms, while the positive impact of corruption on marketing and organizational innovation is weaker for new ventures.

Merely a peripheral discussion in project management up until recent years, sustainability has become a central issue in both academia and practice. Despite growing interest and research on sustainable project management, we still know little about how projects in the extractive industries, known for their significant local impact, can be used to foster inclusive sustainable development for local communities. Arguing that extractive industries have inadequately addressed the increasing demands of stakeholders for contributing to sustainable development, we build on the philosophical theory of capabilities and the principle of reciprocity to propose a new framework for community engagement and sustainable project management. The reciprocity framework for community engagement is based on the premise that a sustainable extractive project requires its promoter to nurture constructive and mutually beneficial relationships with local communities. By integrating moral considerations into our framework, we contribute to the paradigm shift required to embed projects in sustainable development by better balancing stakeholders' needs at the economic, environmental, and social levels.

The extractive industries have been subject to countless social and environmental controversies in the past few decades which put into question their ability to contribute to sustainable development. A key reason why controversies create significant challenges for the extractive industries is because they are subject to a “reputational commons”, which causes the negative actions of a firm to spillover and taint the entire industry to which it belongs. The literature to date has little to say on how extractive industries can manage this reputational commons problem. In this paper, we contextualize fundamental ideas of industry-self regulation to the extractive industries to explain how the problem can be managed through collective action. The importance of sanctions in ensuring substantive commitment to community engagement strategies that improve environmental and social performance is explained. Arguing that extractive industries have inadequately addressed the increasing demands of stakeholders for contributing to sustainable development, we also propose a new resource-exchange framework for community engagement and the pivotal role of industry self-regulation for enforcing such an approach. This proposed framework is centered on fostering local resilient development to compensate for the extraction of natural resources.

The institutional environment of developing countries may lead firms to engage in unlawful firm conduct, which is a pervasive problem in this context. Our paper examines the effectiveness of organizational practices for ensuring that firms adhere to the law in the light of pressures from the institutional environment to be unlawful. Using the lens of anomie theory, we investigate: (a) the negative effect of aspects of the institutional context-regulatory burden and lack of industry munificence-on a law-abiding climate, a type of organizational climate related to unlawful conduct, and (b) the role of socially responsible organizational practices in combating these negative effects. Survey data were collected from 118 firms and analysed using OLS moderated regression. Our results indicate that a manager's perceptions of regulatory burden and lack of industry munificence are negatively related to the extent to which the firm has a law-abiding climate. Furthermore, our findings shed light on the ability of socially responsible practices to countervail this effect. While the negative effect of perceived regulatory burden on law-abiding climate weakens when codes of ethics are used more extensively by a firm, it strengthens when firms hold a CSR certification. The latter finding may be due to the lack of enforcement associated with the specific certification considered in our study.

Despite unethical conduct being a common practice of firms in developing countries, there is little known of the antecedents of ethical climates particularly salient to the context that underlie the conduct of firms. Using the theoretical lens of anomie theory, we uncover and explore the impact of environmental factors on firms' adoption of

The specific question posed in this study is how does corruption faced by a firm affect their innovation activity? In order to answer this question I typify innovation activities of firms in a manner that is relevant in the context of corruption in developing countries, based on the argument that firms are affected by corruption through their interactions with the institutional framework of their environment. I predict that that corruption has a direct negative effect on innovation activities that require the obtainment and enforcement of patent protection, namely product and process innovation, due to these types of innovation requiring exchanges with institutional actors. Institutionally-independent innovation, which include marketing-based innovations that do not require patent rights are argued to have either a complimentary or substitutive relationship with institutionally-dependent innovation depending on the patent-intensiveness of the industry if the firm. Empirical tests of hypothesis are conducted using survey data from over 7000 Indian and African firms.

Reputational effects on firms whose actions have social consequences are known to affect the reputation of other firms, but the theoretical understanding of this “reputational spillover” has thus far been limited. This paper furthers theoretical development of the phenomenon by uncovering and examining its facets that have received little or no consideration – the severity of spillover across firms and the full scope of the spillover boundary, in which a spillover can reach firms both within and across industries. A theoretical framework that explains the process of reputational spillover is developed, comprised of the focality of the event that affects the origin firm from which the spillover emanates and the perceived relatedness of target firms that receive spillover effects. The framework also includes the effect of environmental factors and institutional intermediaries on the spillover process.