Effects of corruption on international trade in bangladesh

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CHAPTER 1: Introduction
1.1 Background of the study
The expansion in recent years of international trade and global business competition has been
accompanied by growth in corruption. Businesses that operate globally are currently likely to
encounter bribery in many of the countries in which they transact. In recent years, corruption has
attracted a great deal of attention. In countries developed and developing, large or small, market
oriented or other-wise, governments have fallen because of accusations of corruption, prominent
politicians (including presidents of countries and prime ministers) have lost their official
positions.
In Asian countries, corruption and illegal practices are so widespread that they constitute
the actual norm, i.e., a parallel economic system with its own traditions and values. The existing
and growing extent of corruption is so significant that it may severely limit international trade
and serve as a barrier to future international markets. In addition to the deleterious effects on
business, corruption may also exacerbate poverty, political instability, and environmental
degradation. Corruption is rampant throughout the world.
In this term paper we attempt to shape out a clear reflection about how corruption and
international trade are co-related. By using a variety of definitions of corruption and international
trade in the literature review, we have reached in a hypothesis that indicates how corruption
hampers trade across the border.
In order to prove the hypothesis we went to three renowned companies, who are either
directly or indirectly clinked with int. trade. We put possible efforts to collect data through
survey & direct meetings with key personnel. Our collected data has been analyzed with
statistical tools and showed in graphical method.
Consequently, findings & recommendation are shown to the next.

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1.2 Objectives of the study
Our purposes were to learn through practical application, how corruption & international trades
are interconnected and how businessman copes up with adverse corruption to sustain in
international market.
Hence, some other objectives are stated below:
 To figure out how corruption takes place internally & vice versa.
 To know how corruption hampers business total output & product quality.
 To measure if corruption prohibits international investment or not.
 To inquest if companies use any anti corruption policy to withhold fraud.
 To illustrate businessman‟s opinion about supporting corruption or any other fraudulent
way to carry on trade.
1.3 Scope of the study
Recognizing the limitations we have faced and the need to understand further issues related to
combating corruption in international business, we designed a detailed paper based on survey
which sought to examine:
 The levels of awareness and perceptions of companies regarding particular anti-
corruption instruments;
 The type of and extent to which anti-corruption practices and activities have been
applied by businesses.
 The factors and drivers influencing the approaches and attitudes of these stakeholders to
combating corruption;
 How, if at all, social awareness & other related precaution could be applied for the
purpose of combating Corruption.
1.4 Limitations of the study
Though we put our best effort to fulfill our determined objectives, still there were some
limitation we had to go through-
 Books on this issues are very few in number
 Very limited time which it needs much time for preparing term paper
 We were not allowed to go out for data collection during office hours.
 No momentary allocation
 The area on this term paper is very big but we had to finish the work within a very short
phase.
 As our sample size was small, our findings might not be fully accurate.

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CHAPTER 2: Literature Review
In absence of a serious academic review such an important national and international issue
remained confiscated. To do this study we have reviewed national and international literatures on
corruption and international trade. We also remained conscious about literature selection and
review. Among the reviewed literature, some major findings can be illustrated which are more
relevant with corruption combating process in Bangladesh.
2.1 International Trade
International trade is the exchange of capital, goods, and services across international borders or
territories. In most countries, such trade represents a significant share of gross domestic product
(GDP).Trading globally gives consumers and countries the opportunity to be exposed to new
markets and products. Almost every kind of product can be found on the international market:
food, clothes, spare parts, oil, jewelry, wine, stocks, currencies and water. Services are also
traded: tourism, banking, consulting and transportation. A product that is sold to the global
market is an export, and a product that is bought from the global market is an import. Imports
and exports are accounted for in a country's current account in the balance of payment.
All countries need goods and services to satisfy wants of their people. Production of goods and
services requires resources. Every country has only limited resources. No country can produce
all the goods and services that it requires. It has to buy from other countries what it cannot
produce or can produce less than its requirements. Similarly, it sells to other countries the goods
which it has in surplus quantities. India too, buys from and sells to other countries various types
of goods and services.
International trade means trade between the two or more countries. International trade involves
different currencies of different countries and is regulated by laws, rules and regulations of the
concerned countries. Thus, International trade is more complex.
According to Wasserman and Haltman, “International trade consists of transaction between
residents of different countries”.
According to AnatolMarad, “International trade is a trade between nations”.
According to Eugeworth, “International trade means trade between nations”.
According to John D. Doniels and Daniel P. Sullivan, “International Business consists of all
commercial transactions, including- sales, investments and transportation- that take place
between two or more countries”
According to Ricky W Griffin and Michael W. Pustay, “Any business transaction between
parties from more than one country is part of international business”
International trade is in principle not different from domestic trade as the motivation and the
behavior of parties involved in a trade do not change fundamentally regardless of whether trade

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is across a border or not. The main difference is that international trade is typically more costly
than domestic trade.
The reason is that a border typically imposes additional costs such as tariffs, time costs due to
border delays and costs associated with country differences such as language, the legal system or
culture. International trade consists of „export trade‟ and „import trade‟. Export involves sale of
goods and services to other countries. Import consists of purchases from other countries.
2.2 Corruption
In reviewing the literature, the researchers found varieties of definition of corruption in terms of
society, community and group of people discussed by the academics and researchers‟ Myint
(2000) in his paper “Corruption: Causes, Consequences, and Cures” has defined corruption as
the use of public office for private gain, or in other words, use of official position, rank or status
by an office bearer for his own personal benefit. Following from this definition, examples of
corrupt behavior would include: (a) bribery, (b) extortion, (c) fraud, (d) embezzlement, (e)
nepotism, (f) cronyism, (g) appropriation of public assets and property for private use, and (h)
influence peddling. In this list of corrupt behavior, activities such as fraud and embezzlement can
be undertaken by an official alone and without involvement of a second party. While others such
as bribery, extortion and influence peddling involve two parties – the giver and taker in a corrupt
deal.
Kamus Besar Bahasa Indonesia (KBBI) defines corruption as ― misappropriation or misuse
of state funds (companies, etc.) for personal gain or other person
Transparency International (TI) defines corruption as ― “The misuse of entrusted power for
private gain”
Oxford Dictionary defines corruption as ― “Perversion or destruction of integrity in the
discharge of public duties by bribery or favor.”
Corruption is a broad term covering a wide range of misuse of entrusted funds and power for
private gain: Theft, fraud, nepotism, abuse of power, etc.
Dr. Petrus van Duyne defines corruption as ― Corruption is an improbity or decay in the
decision-making process in which a decision-maker consents to deviate or demands deviation
from the criterion which should rule his or her decision-making, in exchange for a reward or for
the promise or expectation of a reward, while these motives influencing his or her decision-
making cannot be part of the justification of the decision.

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2.3 Effects of Corruption on International Trade
Corruption is generally considered one of the greatest enemies of international trade. Where
corruption runs rampant, fair players are prevented from accessing the market and performance
and quality are excluded from competition by those who use bribery as a means of acquiring
contracts. It is a problem of vast magnitude: according to a frequently quoted World Bank study,
an estimated USD 1 trillion in bribes are paid each year.1 Corruption is said to increase the total
cost of doing business globally by up to 10% and the cost of procurement contracts in developing
countries by up to 25%. This means that for the EU alone approximately EUR 120 billion, or 1%
of its GDP, is lost to corruption every year.
Corruption distorts markets and, like other forms of anti-competitive behavior, damages all
involved in the supply of goods and services – and ultimately national economies.
No country is immune from corruption. It flourishes where the criminal justice system and
governance is weak, where decision-making is unaccountable and access to decision-makers is
dependent on restricted social networks, where pay is low and where management controls are
weak.
 2.3.1 CORRUPTION DETERS COMPANIES FROM INVESTING:
The World Bank identified corruption as the biggest impediment to investment in an investment
survey of nine African countries. A 2006 survey of seven countries by risk consultancy Control
Risks found that "More than 35% of companies surveyed had been deterred by an otherwise
attractive investment because of the host countries reputation for corruption."
Corruption‟s negative impact on foreign direct investment can amount to an extra 20% in tax –
discouraging investment and reducing profit margins. IMF research suggests that corruption
reduces investment by around 5% and that an "increase of 1 point in the corruption index can
result in a reduction of foreign investment by as much as 8%."
The adverse macro-economic impacts are self-reinforcing. As Control Risks notes:
"If good companies avoid investing because of concerns about corruption, host countries also
lose out: the investors that they attract are likely to have lower standards, both of integrity and
professional competence. Reputation matters in another respect. When companies from emerging
economies enter the international market, they find it harder to win the trust of partner
companies."
 2.3.2 CORRUPTION DENIES COMPANIES CONTRACTS THAT WOULD
CREATE JOBS AND HAVE KNOCK-ON ECONOMIC BENEFITS;
Companies lose business because they are unwilling to pay bribes or are out-bribed by
competitors. The 2006 Control Risks Survey reports:
"Overall, 43% of respondents believe that they failed to win new business in the last five years
because a competitor had paid a bribe, and one-third had lost business to bribery in the last year."

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 2.3.3 CORRUPTION DRIVES UP THE COST OF CAPITAL INVESTMENT:
Transparency International's 2005 Global Corruption Report points out that:
“Capital is to an extent different each time� For example new buildings are more difficult to
price than new trucks. Unlike with new trucks, the supplier – the builder – has more information
about the true cost than does the purchaser. This difference in information – known as an
„information asymmetry‟ – translates into an opportunity for corruption. The direct effect of such
corruption is to drive up the cost of building infrastructure – that is, the capital cost.”
 2.3.4 CORRUPTION INCREASES BUSINESS RISK:
Paying bribes incurs high reputational and other risks for companies. As Control Risks points
out:
"Corruption demands secrecy, but there are fewer secrets in an era of rapid, worldwide
communication. Those who break the rules are more likely to be found out. A corruption scandal
in one part of the world will affect a company‟s reputation – and its commercial prospects –
thousands of miles away."
In addition, bribe paying has its own dynamic:
"Once a company has a reputation for paying, officials will seek an opportunity to levy their
„share‟. It is hard to resist when a company‟s earlier behavior suggests a willingness to pay"
 2.3.5 CORRUPTION INCREASES PRICE OF THE PRODUCT:
Corruption cost increases the production cost as well as price of the product.
 2.3.6 CORRUPTION DECREASES NATIONAL INCOME:
Corruptions in international trade have negative impact on national income. If corruption arises,
government of any country lose tariff. Again one country can‟t attract international investors,
because of high corruption of government personnel. All of them decrease national income
For analyzing corruption in Bangladesh, the researchers studied plenty of areas as per their
aptitude. In this study we aim to generate the perception of two most imperative sections of
people (the civil servants and the politicians) about causes, consequences and effects of
corruption on international trade. In the following chapters the perception of those important
respondents will be appraised in combating corruption which may help to supplement the
knowledge of corruption on international trade in general and policy researchers in particular.

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CHAPTER 3: Research Methodology & Sample Design
This chapter examines the research methodology which generally means the selected methods of
achieving the research objectives. To be more precise, it primarily focuses on the method(s) of
data collection along with the justification of using the method(s). It also includes basic
parameters to be chosen related to the selected method(s). In addition to that, the instruments for
gathering data also fall within the definition of methodology of a research (Aminuzzaman:
1991).
3.1 Methods
Assessing and identifying the effects of corruption on international trade in the context of
Bangladesh is a matter of qualitative judgment. For the purpose of this study, two methods are
used namely
i. Content Analysis
ii. Questionnaire Survey
Content Analysis: This includes collecting related information and data from all relevant books,
documents, published and unpublished research works available, online articles, notes etc
Questionnaire Survey: This survey is intended to gather primary data about effects of
corruption on international trade in Bangladesh with a semi-structured questionnaire.
3.2 Sources of Data
The data for this study have been collected both from primary and secondary sources. Secondary
data are drawn from the existing literatures like books, newspaper reports, previous research
works, seminar papers, reports, online etc. Primary data have been collected through
questionnaire survey. The respondents included the importers and exporters of different industry.
3.3 Data Collection Techniques
To collect data, in-depth interviews are conducted through close ended semi structured
questionnaire.
3.4 Sampling
Importers and exporters are directly related with international trade. They know very well about
effects of corruption on international trade. So we took them as our sample.

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3.5 Sample Size
Our tram paper is about effects of corruption on international trade. Many people of our country
do not have any knowledge of corruption on this area. So that we took our respondents from
importers and exporters, who are specialist on this area. We can manage three specialist of
international trade from different organization. They help us through giving raw information
about their international business circumstance. They also told us how they face corruption and
“what are the effects of corruption on international trade”.
3.6 Data Validation
The collected data have been validated through cross checking with each other and with the
secondary sources.
3.7 Data Analysis Tools/ Techniques
There are some tools which are used in analysis. These are various figures, tables, charts. These
instruments are used in the analysis with the information we got.
We follow the qualitative survey system. Though our sample size is very few, our data is more
relievable.

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CHAPTER 4: Data Analysis & Findings
In this chapter we convert our raw data and verbal information into valuable structured
information. We make percentage of the responses. And present that percentages on different
graphs and chart.
4.1 Analysis and Findings
 THREE GEOGRAPHICAL AREAS IN WHICH UNETHICAL BUSINESS PRACTICES ARE
INFLUENCING THEIR OPERATIONS THE MOST:
We asked through our survey to rank (out of 10) three geographical areas in which unethical
business practices are influencing their operations the most. All of them pointed out that Asia are
the most corrupted area. Middle East and Africa are in second position. Others area are free from
corruption but not fully. They also pointed out that every custom are corrupted, more or less.
Geographical area Respondent
1
Respondent
2
Respondent
3
Total points %
ASIA 9 8 9 26 43.7%
Middle East and
Africa
7 5 8 20 33.61%
Others 5 3 5.5 13.5 22.69%
59.5 100%
-
Interpretation: Through analyzing this result we found that Asia is the most corrupted area.
The reasons might be the poor economic condition of the people and lack of governments‟
concentration about enforcing law against corruption.
0
10
20
30
40
50
Most currupted
area
ASIA
MIDDLE EAST AND
AFRICA
OTHERS

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 PROBLEMS RELATED TO CORRUPTION IMPEDE FOREIGN DIRECT INVESTMENTS IN
ANY OF THE MENTIONED AREAS:
We asked them if they ever experience that problems related to corruption impede foreign direct
investments in any of the mentioned areas. They replied that they always face problems to invest
directly in ASIA. They face fewer problems related to corruption in outside the Asia. But
investment in these areas is more difficult because of government legislation against foreign
investment.
Geographical area Respondent
1
Respondent
2
Respondent
3
Total points %
ASIA Always(9) Always(9) Always(9) 27 50.94%
Middle East and
Africa
Sometimes(6) Seldom(4) Seldom(4) 14 26.42%
Others Seldom(4) Seldom(4) Seldom(4) 12 22.64%
53 100%
Interpretation: Through analyzing this result we found that investors of Bangladesh face more
corruption related problems in direct investment in Asia. But sometimes corruption makes the
foreign investment free form obstacles. Then investment is easier in corrupted way than legal
way. Again corruption related problems in direct investment are fewer in outside of Asia. But
their government regulation is starchier that direct investment may be impossible.
0
10
20
30
40
50
60
Problems related
to corruption to
invest directly
ASIA
MIDDLE EAST AND
AFRICA
OTHERS

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 COMPETITORS INFLUENCE TENDER/CONTRACT PROCEDURES:
We asked them if they ever have reason to believe that their competitors influence
tender/contract procedures unduly. Two of them replied us “Never”. One said “seldom”
Respondent
1
Respondent
2
Respondent
3
Competitors
influence tender
procedures
Never Never seldom
Responses respondents %
Never 2 66.67%
Seldom 1 33.33%
Often 0 0%
Interpretation: Through analyzing this result we found that competitors can seldom influence
tender/contract procedure. Exporters of Bangladesh get contract through buyers. They create
good relationship among them through providing best service. Again buyers are always
searching for best quality. So that there are little scope of corruption. But contract dealt with
government agencies can be corrupted in various ways.
0
10
20
30
40
50
60
70
80
competitors
influence tender
procedures
Never Seldom
Often

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 IF LOSING AN IMPORTANT CONTRACT (PROBABLY) BECAUSE OF CORRUPTION, OR
SIMILAR PRACTICES, WHAT IS THEIR MOST TYPICAL REACTION(S):
We asked through our questionnaire if they losing an important contract because of corruption,
what their most typical reaction is. And if they don‟t show any reaction, what are the reasons. All
of them replied us “We adjust our strategies to the business culture”. One of the respondents also
said, “We try to avoid those country or organization in future.”
Respondent
1
Respondent
2
Respondent
3
Reaction against corruption We adjust our
strategies to the
business culture
We adjust our
strategies to the
business culture
We adjust our
strategies to the
business culture
We try to avoid those
country or
organization in future
Adjust their
strategies to the
business culture
3 75%
Try to avoid
those country or
organization
1 25%
100%
Interpretation: Most of the exporters and importers of Bangladesh didn‟t show any big reaction,
if corruption will happen. Sometimes corruption is beneficial for them. They thought their
competitors will take the advantage of corruption, so why they won‟t. Sometimes they accept
corruption to survive in competitive market
0
20
40
60
80
100
120
Reaction
against
corruption
Try to avoid in future
Adjust strategies

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 THE REASONS OF NOT SHOWING ANY BIG REACTION AGAINST CORRUPTION:
Many of the exporters/importers don‟t show any reaction against corrupted activities. We asked
them to rank (out if 10) the reasons of it.
Response Respondent
1
Respondent
2
Respondent
3
Total points %
Concern about
sanctions from the
bribing company
9 8 8 25 26.88%
Concern about
future business
cooperation
9 9 9 27 29.03%
Concern about
sanctions from
customers
7 8 7 22 23.66%
Lack of knowledge
about the illegality
of the act
4 5 4 13 13.98%
Lack of proof 2 2 2 6 6.45%
93 100%
Interpretation: The main reason of not to show any reaction against corruption is concern about
future business cooperation. If they filed any complain against any organization/person. They
will not cooperate him in future. So that he loses the competition. And obstacles are created more
for him. He will not able to offer his best to the customers. So he also loses the market
0 5 10 15 20 25 30
Reasons of not showing any
reaction against corruption
Lack of proof
Lack of knowledge about the
illegality of the act
Concern about sanctions from
customers
Concern about future business
cooperation
Concern about sanctions from the
bribing company

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 IF THEY HAVE TO PAY ANY ADDITIONAL PAYMENT OR NOT. AND ANNUAL MAXIMUM
ACCEPTABLE SIZE OF SUCH PAYMENTS:
We asked them, “When operating in foreign markets, do you ever have to pay some irregular
“additional payments” to get things done?” All of them answered “Always”. We also asked to
know the maximum acceptable size of such payments. Two of the respondents said,“10 to 100
lac”. One said, “1 to 10 lac”.
Respondent
1
Respondent
2
Respondent
3
Annual maximum
acceptable size of
additional payment
10 to 100 lac 1 to 10 lac 10 to 100 lac
1 to 10 lack 1 33.33%
10 to 100 lac 2 66.67%
total 3 100%
Interpretation: All the importers and exporters of Bangladesh have to pay additional payment
illegally. The annual maximum size may be 1 to 20 lac. They have to pay more additional
payment in Bangladesh than importer/exporters‟ country.
Annual maximum acceptable size of
additional payment
1 to 10 lac
10 to 100 lac

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 THE CIRCUMSTANCES COULD IT BE ACCEPTABLE FOR A COMPANY TO INFLUENCE
CLIENTS BY HELP OF A SIGNIFICANT BENEFIT, A VALUABLE GIFT OR A BRIBE:
We requested them to rank (out of 10), “The circumstances could it be acceptable for a company
to influence clients by help of a significant benefit, a valuable gift or a bribe”
Response Respondent
1
Respondent
2
Respondent
3
Total points %
As long as the firm
may end up with an
important contract
9 8 9 26 36.11%
When there is no
other way of
operating in the
market
9 9 9 27 37.5%
When the contract
is necessary to
avoid insolvency
4 8 4 16 22.22%
It is not accepted
under any
circumstances
1 1 1 3 4.17%
72 100%
Interpretation: The importers or exporters of Bangladesh do not want voluntarily to give bribe.
The circumstances create pressure on them to be corrupted. If their competitors try to win
competition by giving bribe, they have to follow the same way. Otherwise they slash out from
competition. Again if second party is being corrupted, there is no other way of operating in the
market. So that, they have to offer bribe or other valuable gifts.
0 10 20 30 40
It is not accepted under any
circumstances
When the contract is necessary to
avoid insolvency
When there is no other way of
operating in the market
As long as the firm may end up
with an important contract

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 HAVE CORRUPTION ANY ADVERSE EFFECT ON THEIR FIRM WHILE INTERNATIONAL
TRADE:
All of our respondents argued that corruption have adverse effect on their firm while
international trade. But two of them also argued sometimes it have positive effect on their firm.
Respondent
1
Respondent
2
Respondent
3
Responses Have adverse
effect as well
as positive
effects
Only adverse
effect
Have adverse
effect as well
as positive
effects
Adverse effect 3 60%
Positive effect 2 40%
total 5 100%
Interpretation: Though corruptions have adverse effect on international trade, sometimes it has
positive effect on it. Importers and exporters can easily and quickly get into role by giving bribe.
Again it also helps them to spread their markets on foreign area by removing authorial obstacles.
0
20
40
60
80
100
120
Effects on firm
positive effect
Adverse effect

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 CORRUPTION AND PRICE RISING:
Respondents said us corruption and price have positive relationship. If corruption is more prices
will be more. They pointed out that they record corruption cost as a production and marketing
cost of imported/exported product. So that if corruption cost is more buying price of that product
will be more.
Interpretation: corruptions have bad impact on international trade. Corruption cost increases the
production cost as well as price of the product. So some time it effects on quality of the product.
To manage price sometime quality of product will decreases.
 Corruption and their offering system:
Corruptions make obstacles in offering system of any company. Corruption increases price of the
product. That is one of the reasons of decreasing quality of the product. So a company can‟t offer
its best.
All of our respondents ensure that if corruptions will no more, they could offer their best to the
consumers.
Price
Corruption
A
O
B
P2P1
11
Corruption price relationship

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 IMPACT OF CORRUPTION IN INTERNATIONAL TRADE ON NATIONAL INCOME:
All of our respondents argue that corruptions in international trade have negative impact on
national income of Bangladesh.
Interpretation: Corruptions in international trade have negative impact on national income of
any country. Importers and exporters decrease their international trade because of high
corruption. If corruption arises, government of any country lose tariff. Again one country can‟t
attract international investors, because of high corruption of government personnel. All of them
decrease national income.
After analyzing all data we found that Asia is the most corrupted area. And corruptions have
wide impact on its international trade. And the impact is always negative. Like a other Asian
countries Bangladesh faces all the bad impact of corruption on its international trade. Corruption
decreases its national income as well as foreign trade. It de-motivated foreign investors also. So
it‟s time to take some anti-corrupted effort by government. All of our respondents ensure us, if
government takes any anti-corrupted efforts, they will support that as an importers and exporters.
N1
11
National Income
C1
C2
N2
11
Corruption

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CHAPTER 5: Conclusion & Recommendation
There is no scope of internal corruption, on those organizations where we visited. But, for
surviving in the international market they have to adopt some illegal policy. For this reason
corruption has become a chain, which cannot be easily broken. Corruption can be reduced, but
cannot be stopped.
By our analysis we found that the main reason of corruption is poverty. For this reason in Asia
and Africa sub-continent the rate of corruption are very high. Developing countries like ours the
salary of government employee are very low, for maintaining their day to day expenses they
become corrupted. In this circumstance, for reducing the corruption salary of govt. employee can
be increased and sufficient knowledge about business ethics should provide to them.
If and only if corruption is reduced, our total national income as well as private gains of those
company‟s product qualities and reputation in international market will rapidly increased.
Here some possible suggestion are listed below to discourage fraudulent & to adopt anti
corruption policy:
 Anti corruption policy should be designed at the very beginning of starting operation.
 Proper way should be defined to measure whether corruption have taken place or not.
 None but only Government can make actual changes to withhold rapid growth of
corruption. Hence, it‟s a crying need to adopt & utilize needed action to prohibit
corruption.
 Public & private company should have their own ethical prospectus to be followed.
 Newly recruited employees shall be given moral guideline, as well as old one should be
kept in intensive check up.

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Reference
BOOK
1. Doniels John D. , Rodebough Lee H. ,Sullivan Daniel P. & Salwan Prashant (2014),
International Business, 12th
edition; UP, India: Dorling Kindersley Pvt. Ltd.
2. Griffin Ricky W., Pustay Michael W (1999), International Business: A Management
Perspective, 2nd
edition; Boston, United State: Addison-Wesley Publication
Company,Inc.
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/Bonell__Meyer_-_The_Effects_of_Corruption_in_International_Commercial_Contracts.pdf
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sudur%20Rahman.pdf?sequence=1
[Accessed: 4th July 2015]

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APPENDICES
Appendix 1: Table given below shows the details about the participants of the study
Name of the Participants Position & Other Information
Md. Azizur Rahman Senior commercial officer
Farid Group
Head office: Plot No: b-22/23/24, BSCIC, Industrial
Area, comilla-3500, Bangladesh.
Phone: 880-81-77203, 77439, 77246
Fax: 880-81-77267
Mobile: 01713-491714, 01718-184585
E-mail: azizur@faridgroupbd.com
Website: www.faridgroupbd.com
Mohammad Biplob Sarker Executive(law), credit & recovery
Ifad Autos Limited
Office: Sonartori tower (14th-18th floor), 12-
Biponon C/A Sonargaon road,Dhaka
1000,Bangladesh
Cell No: 01714 162396
Fax: 880-2-8616148
Website: www.ifadgroup.com
Md. Al- Amin Sharif Proprietor
Ramij Electronic Store
Morshed Electronic Market (Aziz market)
131/1, B.C.C Road, Nawabpur, Dhaka-1000,
Bangladesh
Tel: 7112055, 7112138
Fax:88-02-7112138

XXII | P a g e
Appendix 2: Questionnaire
Corruption Survey
Questionnaire
General information
A1 What is your position in the company?
Please indicate your field of responsibility ----------------------------------------------
A2 Where is your headquarter localized? Bangladesh
Outside Bangladesh
1
2
A3 Ownership
Size of state ownership: --------------%
Nationality of leading owner:
----------------------------------------------
A4 Annual turnover worldwide for your company
A5 Major activity of company
Please specify
(If part of a larger conglomerate, circle the
category most
applicable for your unit)
Agri /food industries
Banking, finance and insurance
Construction (roads, dams, tunnels,
buildings, ships, etc.)
Consultancy
Light manufacturing (textiles,
crockery, toys, etc.)
Pharmaceutical/Medicare
Telecoms and IT
Other kind of service
1
2
3
4
5
6
7
8
A6 For how long has your company been
operating with either trade or investments in
foreign markets?
0-10 years
10-30 years
more than 30 years
A7 In which parts of the world does your firm do
business? ------------------------------------------
A8 Is part of your firm‟s production located
outside of Bangladesh?
Yes
NO
1
2
A9 Have you ever traded with or carried out a
project for a governmental institution in any
of the foreign countries where you operate?
No
Yes, periodically
Yes, many times
I do not know
1
2
3
4
Experiences with unethical business practices
B1 If any, please rank the three geographical
areas in which unethical business practices
are influencing your operations the most.
USA and Canada
West and North European countries
South European countries
--
--
--

XXIII | P a g e
Please rank with numbers
Latin America and the Caribbean
East European countries and central
Asia
The Middle East and North Africa
Sub-Saharan Africa
Mainland China (excl. Taiwan and
Hong Kong)
The rest of Asia
Oceania
--
--
--
--
--
--
--
--
--
B2 Do you ever experience a gap between formal
and informal rules in any of the areas just
mentioned?
Never
Seldom
Frequently
Often
Always
I do not know
1
2
3
4
5
6
B3 Do you ever experience that problems related
to corruption impede foreign direct
investments in any of the mentioned areas?
Seldom
Frequently
Sometime1
Always
We do not have the relevant
experience
I do not know
1
2
3
4
5
6
7
B4 When competing for a contract in the areas
mentioned, do you ever have reason to
believe that your competitors influence
tender/contract procedures unduly?
Never
Seldom
Frequently
Often
Always
1
2
3
4
5
B5 Have you experienced that unethical business
practices by competitors have placed your
company in a more adverse competitive
position?
No
We think it has made us lose a
contract(s)
We are convinced that it has made us
lose a contract(s)
We often lose contracts because of
corruption
I do not know
1
2
3
4
5
B6 a) If losing an important contract (probably)
because of corruption, or similar practices,
what is your most typical reaction(s)?
Please circle all that apply
b) If you generally chose not to complain, or
if complaints are ignored or rejected, what do
No big reaction, corruption is part of
the game
We ask for a formal explanation from
the customer
We lodge an appeal to the customer or
the tender authorities
We prefer not to report the case
We retreat from the country
I do not know
1
2
3
4
6
7

XXIV | P a g e
you typically do? No big reaction, corruption is part of
the game
We adjust our strategies to the
business culture
We retreat from the country
We report the case in alternative ways
I do not know
1
2
3
4
5
B7 Independently of the experiences of your own
business unit, what do you think is the most
common reason for a company to keep quiet
when encountering a competitor in bribery?
Please rank the most important alternatives
with numbers
Concern about sanctions from the
bribing company
Concern about sanctions from other
companies
Concern about future business
cooperation
Concern about sanctions from
customers
Lack of knowledge about the illegality
of the act
Lack of proof
Other? Please specify--------------------
I do not know
1
2
3
4
5
5
6
7
B8 Have you ever experienced that a competitor
has won a contract by help of political
pressure?
No
Yes
I do not know
1
2
3
Operating in markets where corruption is more common
C1 When operating in foreign markets, do you
ever have to pay some irregular “additional
payments” to get things done?
Never
Seldom
Sometimes
Frequently
Often
Always
I do not know
1
2
3
4
5
6
7
C2 What is the maximum acceptable size of such
payments in your industry?
0 – 10 Lac TK
10-100 Lac TK
Above 100 Lac TK
I do not know
1
2
3
4
C3 How common would you expect it to be, for
companies in your line of business, to
influence clients by help of corruption or
similar undue business practices?
I think it never happens
I think it happens in around 1-10% of
the cases
I think it happens in around 10-20% of
the cases
I think it happens in 20-30% of the
cases
I think it happens in more than 30% of
the cases
1
2
3
4
5

XXV | P a g e
I do not know 6
C4 Under what circumstances could it be
acceptable for accompany to influence clients
by help of a significant benefit, a valuable gift
or a bribe?
(Please rank with number)
As long as the firm may end up with
an important contract
When there is no other way of
operating in the market
When the contract is necessary to
avoid insolvency
It is not accepted under any
circumstances
I do not know
1
2
3
4
5
C5 To your knowledge, has your company ever
accepted a request from an agent, an adviser
or a consultant about money that probably
would be applied for bribery?
No
Probably not
Probably
Yes
I do not know
1
2
3
4
5
C6 Considering the following alternatives, what
would you suggest is the most important
underlying motivation for companies in your
line of business to offer bribes?
„The fear of losing contracts because
someone else has bribed the decision-
makers‟
„Because the goods or services offered
would never be chosen in a fair
competition‟
„To persuade decision-makers to buy
goods or services that otherwise would
not have been demanded‟
I do not know
1
2
3
4
Impact
D1 Do you think, corruption have any adverse
effect on your firm while international trade?
Yes
No
1
2
D2 Have corruptions any effect on international
relation?
Yes
No
1
2
D3 Is corruption responsible for rising price of
the product?
No
Probably not
Probably
Yes
I do not know
1
2
3
4
5
D4 Can‟t you provide your best offer to your
customer because of corruption(s)?
No
Probably not
Probably
Yes
I do not know
1
2
3
4
5
D5 Do you think, corruption have any impact on
national income of a country?
Yes
No
1
2
Control
E1 Do you think anti-corruption efforts made by No 1

XXVI | P a g e
your own business organization have
influenced the attitudes against bribery in
your company?
No, we already had a clear attitude
against bribery
Yes, it has influenced our attitude to
some extent
Yes, it has clearly altered our attitude
I am not familiar with their campaigns
I do not know
2
3
3
4
5
E2 Given that you are familiar with the anti-
corruption legislation, do you find it difficult
to respect?
No
Usually not
Often
Yes
1
2
3
4
E3 What do you consider the major reason for
not paying bribes when operating in foreign
markets?
Please rank the most important alternatives
with numbers
It is illegal
It is immoral
It may harm the reputation
It may place our employees in an
unsafe situation
It is expensive
Accounting practices make it difficult
It is not part of our company culture
Corruption disturbs the function of
markets
I do not know
…
…
…
…
…
…
…
…
…
E4 a) Does your company have a set of internal
written codes of conduct that restricts
employees from paying bribes?
b) Do you have routines to detect violations
of these codes?
c) What is the typical reaction from the
company if a serious violation of ethical
codes (like corruption) is detected?
No
Yes
No
Yes, we some routines
Yes, we have efficient routines
No big reaction
Internal discussions
Internal inquiry
Investigation by an external
committee or consultancy
Involve the police
I do not no
1
2
1
2
3
1
2
3
4
6
7
E5 a) Do you have routines to detect your own
employees in receiving bribes?
b) Has your company ever detected an
employee in receiving a bribe?
No
Yes
I do not know
No
Yes
1
2
3
1
2

XXVII | P a g e
We would appreciate any thoughts you might like to add related to your responses or to the topic
in general. Comments on this survey are of course also welcome. (Please add a sheet if the space
here is too limited)

Effects of corruption on international trade in bangladesh

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