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Table 1 describe the sampel of firm’s bribery related import license. There are 81 firm-level observation that response
”yes” or ”no” to the question whether they commit bribe related impor license. IMBRIBE variable which is the primary
variable in this research, has an average value of 0,31. It means that 31% of the companies have made bribes.
Furthermore, 0,74 felt that licensing was a business barrier. Of the 81 companies, 80% use external audit services. Top
managers have an average of 15.5 years of experience.

Table 2 Descriptive Statistics OPBRIBE
Variables Obs Mean S.D. Min. Max.
IMBRIBE 67 0.22 0.42 0 1
PERMIT 67 0.83 1.04 0 4

EXP 67 15.69 9.52 1 39
AUDIT 67 0.75 0.44 0 1
COURT 67 2.72 1.07 1 4
SIZE 67 24.39 3.51 17.91 31.22
AGE 67 23.58 11.90 3 52

COMP 67 1.06 1.13 0 4
Remarks: OPBRIBE = bribery related operation license; PERMIT= business obstacles; EXP= top manager experience; AUDIT= using external auditor or not, dummy variable;
COURT= perception of justice; SIZE= firm size measured by Ln sales; AGE= firm age; COMP= perception of competitor as obstacles.

Table 2 is a descriptive statistic of the operating licensing bribes. After going through the selection criteria, only 67
companies were complete data. The bribe rate for operating permits averaged 22%. Licensing as a business barrier
reached an average value of 0.83. top manager experience averaged 15.6 years. Furthermore, 75% of companies use
external auditors. Perception of business barriers related to competitors is worth 1.06.

3.2 Empirical Modeling Approach
We estimate logit models explaining firm’s bribery behavior. There are two models to test our hypoheses follows the
following structure:

Equation (1) explains the likelihood that firm i will commit to bribe regarding import license application that caused by
the firm’s perception of the level of permit obstacles.
IMBRIBEi = β0 + β1PERMITi + β2EXPi + β3AUDITi + β4COURTi + β5SIZEi + β6AGEi +
β7COMPi + ei (1)
Equation (2) explains the likelihood that firm i will commit to bribe regarding operation license application that caused
by the firm’s perception of the level of permit obstacles.
OPBRIBEi = β0 + β1PERMITi + β2EXPi + β3AUDITi + β4COURTi + β5SIZEi + β6AGEi +
β7COMPi + ei (2)

Note:
IMBRIBE: Experience of company bribery related to import licensing. The dummy variable has a value of 1 if the
company has experience of committing bribes related to import licensing and has a value of 0 if the
opposite is true.
OPBRIBE: Experience of corporate bribery related to operating licensing. The dummy variable has a value of 1 if the
company has experience in committing bribes related to operating licensing and has a value of 0 if the
opposite is true.
PERMIT: Perception regarding business obstacles related to the licensing factor. The measurement uses a Likert scale
of 0 to 4, where approaching the value of 4 means that licensing is the toughest obstacle and approaching 0
means that it is not an obstacle.
EXP: Work experience of Top manager.
AUDIT: Dummy variable, worth 1 if the company uses the services of an external auditor.

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