Customer-Driven Misconduct: How Competition Corrupts Business Practices

Bennett, Victor Manuel; Pierce, Lamar; Snyder, Jason A.; Toffel, Michael W.

doi:10.2139/ssrn.2005779

Cited by 37 publications

(40 citation statements)

References 73 publications

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“…Another study that looked at market competition using firm‐level data to try to overcome difficulties from looking at cross ‐ country data found that stronger product market competition is associated with an increase in the levels of corruption (Alexeev and Song, ). This finding was also supported in a different empirical study that also used data from exclusively one state (New York 2007 – 2010), and one industry (Bennett et al ., ).…”

Section: Causes Of Corruptionmentioning

confidence: 97%

Causes and Effects of Corruption: What Has Past Decade's Empirical Research Taught Us? A Survey

Dimant

Tosato

2017

Journal of Economic Surveys

254

190

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Corruption has fierce impacts on economic and societal development and is subject to a vast range of institutional, jurisdictional, societal, and economic conditions. It is this paper's aim to provide a reassessment and a comprehensive state-of-the-art survey of existing literature on corruption and its causes and effects. A particularly strong focus is put on presenting and discussing insights resulting from empirical research and contrasting recent with older findings.

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Section: Causes Of Corruptionmentioning

confidence: 97%

Causes and Effects of Corruption: What Has Past Decade's Empirical Research Taught Us? A Survey

Dimant

Tosato

2017

Journal of Economic Surveys

254

190

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“…Stock-option backdating in the U.S. is well suited to studying the diffusion of misconduct. It provides a rare opportunity to observe an entire population at risk, as well as every instance of adoption, thus circumventing selection problems that have constrained past misconduct researchers (exceptions include Pierce and Snyder, 2008;Bennett et al, 2013;Graffin et al, 2013;Palmer and Yenkey, 2015;Yenkey, 2017). The recipient, issue date, and strike price of every executive stock-option grant issued in the United States is reported, which makes it possible to estimate the likelihood that an award is backdated directly from the data.…”

Section: How Misconduct Spreads: Auditors' Role In the Diffusion Of Smentioning

confidence: 99%

How Misconduct Spreads: Auditors’ Role in the Diffusion of Stock-option Backdating

Mohliver

2018

Administrative Science Quarterly

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This paper explores the role of professional experts in the diffusion of innovative practices that subvert the interests of stakeholders. I do so by studying the role of external auditors in the diffusion of stock-option backdating in the United States. Practices that are eventually accepted as misconduct may emerge as liminal practices, not categorized as misconduct until social control agents notice, scrutinize, and react to them. I examine how the role of external auditors in the diffusion of stock-option backdating changed as the practice shifted from liminality to being illegal and illegitimate. The findings suggest that professional experts' involvement in the diffusion of liminal practices is highly responsive to the institutional environment. Initially, professional experts diffuse these practices via local networks. However, when the legal environment becomes more stringent, implying that the practice will become illegitimate, these offices reverse their role and extinguish the practice. The larger network remains largely uninvolved in both the diffusion, and extinguishment, of the liminal practice.

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“…These aspects deserve more attention, which emphasises the importance of the current research. Bennett et al (2013) found that competition among firms may lead to corrupt or unethical activities by firms. They may violate government regulations with regard to price control, pollution and entry strategies, especially where inspection leniency exists.…”

Section: The Negative Effects Of Spilloversmentioning

confidence: 99%

Factors Determining Industrial Competitiveness And The Role Of Spillovers

Kleynhans

2016

JABR

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This article applied regressions and panel data analysis to determine how micro-economic spillovers enhance the competitiveness of firms and industries. What made this study unique was that it considered the interactions between various spillover factors working simultaneously and their effect on competitiveness and also investigated possible harmful effects of spillovers. Data from the Manufacturing Firm Survey of the World Bank was used, which covered the first decade of the third millennium, including world economic crises. The investigation on sales used cross-sectional regressions, following a survey conducted on sales and competitiveness. The general findings were that FDI and technological expenses offered little spillover advantages to firms, but that spillovers from research and development do enhance competitiveness. Managerial expertise and education of the workforce restrict spillovers and enhance competitiveness, while a larger and less educated workforce increases leakages of information and spillovers, suppressing competitiveness. The results further revealed that exports and spending on communication, machinery and equipment, a trained work force and innovation all enhanced sales, but the numbers of new firms and the number of privately owned businesses suppress competitiveness. Concerning the negative effects of spillovers, corruption, crime, theft and disorder increase spillovers and curb competitiveness. More spending on security decreases these negative spillovers, as does support from well-known suppliers. A larger workforce causes more negative spillovers, as do the number of new and temporary workers, more competitors and new suppliers. The findings of this study will be of special value to managers and project planners.

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Customer-Driven Misconduct: How Competition Corrupts Business Practices

Cited by 37 publications

References 73 publications

Causes and Effects of Corruption: What Has Past Decade's Empirical Research Taught Us? A Survey

Causes and Effects of Corruption: What Has Past Decade's Empirical Research Taught Us? A Survey

How Misconduct Spreads: Auditors’ Role in the Diffusion of Stock-option Backdating

Factors Determining Industrial Competitiveness And The Role Of Spillovers

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