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Abstract

This study examines the paradox of financial competence among tourism SMEs in West Africa, where business owners’ expertise in accounting and finance, rather than shielding firms from corruption, may increase their exposure to tax bribery. Using firm-level data from Ghana and Sierra Leone, the analysis reveals that financially competent entrepreneurs are more likely to face bribery requests due to increased transparency and visibility in extractive institutional environments. Logistic regression results show a positive association between financial competence and bribery exposure, with the effect amplified for women-owned firms. The findings highlight a behavioral and institutional mechanism in which competence, signaling financial resilience, attracts rent-seeking attention from inspectors. The study con tributes to institutional and behavioral theories by reframing financial competence as a dou- ble-edged capability in weak governance systems. For managers, the results call for collec- tive transparency strategies, network-based risk management, and stronger oversight mechanisms to reduce discretionary enforcement. For policy and practice, the paper under- scores the need to align financial literacy initiatives with institutional reforms that protect transparent firms from opportunistic exploitation.

Keywords

Financial competence, tourism SMEs, tax bribery, gender bias, developing economies

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