Collective corruption in SMEs in European regions: an organizational ecology and embeddedness perspective

Purpose – This study investigates corruption from the perspective of SMEs across 192 European regions, casting light on their collective strategies and territorial characteristics. SMES are framed as active players, engaging in corruption as a means of dealing with vulnerabilities and strengthening their bargaining position in relation to public officials. Design/methodology/approach – By adopting an organizational ecology and embeddedness perspective, we examine regional, local and organizational factors leading to SME corruption in a framework of collective decision-making. In operational terms, we construct an innovative database consisting of regional, local and organizational data for the EU27 and candidate Member States. Panel regressions are used to assess multi-level determinants of bribery, complemented by robustness checks. Findings – The results show that corruption committed by SMEs is distinct from corruption perpetrated by public officials, with significant territorial variations. At the regional level, SMEs adapt to environmental uncertainty, with territories with more advanced infrastructure less likely to be affected by widespread corruption. At the local level, technological path dependence and embedded networks reinforce collective bribery. Thus, concentration, shared patents and embeddedness facilitate coordinated strategies, whereas new entrants tend to undermine corrupt practices at a collective level. Within organizations, only horizontal normalization works to sustain shared practices. Originality/value – By shifting the focus from individual to collective behaviour, the study challenges the conventional view that SMEs are passive victims,framing them asstrategic playersresorting to corrupt practices to deal with specific risks. By combining organizational ecology and embeddedness, we highlight the contextdependent nature of corruption and its managerial and ethical implications.