Researchers in behavioral economics and psychology have long studied individual decision-making concluding that individuals frequently act in ways that violate traditional assumptions of rationality (Bromiley, 2005; Cyert & March; Mishina, et al. 2010). Acts of corruption reflects rational, self-interested behavior by persons using their discretion to direct resource allocations to themselves or others who offer rewards and power (Rose-Ackerman, 2001). The extant literature primarily states negative implications of corruption on the country and firm level. However, researchers have also found some positive implications on the individual level for corruption such as managers greasing the wheels of economic development in emerging markets. Nevertheless, the literature understates the role of power; as powerful decision makers exacerbate corruption in emerging markets in the African context. The dominant perspectives to explain corruption are institutional and agency theory, yet this study will integrate behavioral theory into a novel framework. We posit a theoretical contribution to the corruption literature by exploring the impact of power dynamics on firm performance in an African context. Through an empirical study involving 162 South African publicly traded firms on the Johannesburg Stock Exchange, we find partial support that highlights the varying implications of corruption on performance and moderating effects of the power of senior decision makers.
