The Link between Firm Characteristics, Bribery, and Illegal Logging in Indonesian Wood-based Industries

Illegal logging is one of the major causes of deforestation in many parts of the world. Frequently, this illegal activity goes hand in hand with bribery and corruption. This paper examines wood-based firms' characteristics to determine the likelihood of their involvement in bribery and illegal logging in Indonesia. It adopts the Gary Becker's model of crime to develop a firm demand function of illegally harvested logs. The firm-level data set available from the Indonesian Central Statistics Agency is used to estimate this demand function.