Political corruption as a source of regulatory obstacles to NPD and the role of business associations in overcoming these obstacles

Abstract

PurposeThis study investigates how perceived political corruption, a generally overlooked corruption type, relates to firms' new product development (NPD) through perceived regulatory obstacles. It also examines firms' perceptions of business association support in this relationship, considering these associations' potential support for NPD.Design/methodology/approachThis study conducted an empirical analysis of 1,663 firms in Turkey, a country noted for a history of legislative corruption, and in which there are strong business associations. Drawing the data from the World Bank's 2019 Enterprise Surveys Dataset, this study tested the hypotheses via the two-stage factor score regression method.FindingsThis study finds that perceived political corruption significantly relates to NPD negatively through perceived regulatory obstacles. It also finds that the perceived support of business associations to NPD is significantly greater when firms perceive regulatory obstacles but only slight political corruption.Originality/valueAs far as political corruption is concerned, this study reveals that corruption can also be the cause of regulatory obstacles, expanding the common view of corruption as a means of overcoming regulatory obstacles to NPD. In addition, it introduces the role of business associations in this relationship by revealing their support to NPD for different levels of perceived political corruption and regulatory obstacles.