The Impact of the Foreign Corrupt Practices Act on U.S. Exports

Adrian E. Tschoegl, Wharton School of the University of Pennsylvania
Paul J. Beck
Michael W. Maher

Abstract

In 1977 the Foreign Corrupt Practices Act (FCPA) was enacted to penalize US firms and their employees for paying bribes to foreign government officials. If bribe payments reward the awarding of contracts and the FCPA differentially affects US exporters compared to foreign competitors, then the US exporters bribe-paying ability and market share would be expected to decline. This study provides empirical evidence that the FCPA had a negative effect on US exports to non-Latin American countries but not to bribery-prone ones in Latin America.