Non-linear impact of globalization on financial crimes: a case of developing economies

Abstract

Purpose The Financial Action Task Force defines money laundering as “processing of these criminal proceeds to disguise their illegal origin”. This is the major portion of financial crime that has ties across borders and like all financial crimes which are well planned and camouflaged, this crime is difficult to detect and deter. Over the years, on one side, globalization has provided development opportunities, it has also become one reason for the pervasiveness of money laundering. This has led to a disturbance in the global financial system and social unrest as proceeds from money laundering are being used in terrorism. The purpose of this study is to explore the non linear effect of globalization on financial crime in the form of money laundering. Design/methodology/approach An investigation based on 119 developing countries from the time period of 1985 till 2015 is conducted in this study. The panel quantile regression model was used to estimate antecedents of money laundering. Findings The study confirmed that globalization follows an inverted U-shaped relationship with money laundering. Furthermore, indicators such as investment portfolio and socioeconomic conditions have a significant effect on money laundering. Originality/value The panel quantile regression model was used to estimate antecedents of money laundering.

Exploration of Role of Economic Globalization on Human Longevity

“…The results prompted that there is a negative effect of trade liberalization on the life expectancy where authors reasoned that it is due to the increase in trade of illegal and demerit goods. Munir, Meo, Younas, Arshed, and Jamil (2021) and R. M. Amjad, Rafay, Arshed, Munir, and Amjad (2021) also confirmed this case where higher foreign resource dependence and capital flight leads to lower growth of the economy. Deyshappria (2018) studied 119 countries in order to assess the role of overall globalization on the incidence of $1.90 poverty.…”

Demand for money laundering in developing countries and its deterrence: a quantitative analysis

“…While accounting for unbalanced panel data, a total of 338 observations were included in the study. For the controlling factors, an increase in trade openness reduces money laundering as it increases opportunities to earn legally (Amjad et al , 2021b). Further indicators such as bureaucratic quality, education quality and strength of accounting standards tend to increase money laundering.…”

“…The government and policymakers can control the crime of money laundering by following means. First, the government can increase the legal profit-making opportunities via trade so that businesses can focus on earning from licit means (Amjad et al , 2021b). The model shows that the direct effect of the mitigating measures is positive.…”

“…The first source is the firms that generate illicit income from tax evasion, while the other source is the politicians that generate illegal income from corruption and diversion of public funds. The legal environment, quality of education system, bureaucracy quality and auditing and reporting standards must be strengthened to prevent the economy from such crimes (Amjad et al, 2021a(Amjad et al, , 2021bChong and Lopez-De-Silanes, 2015;Mohammadi et al, 2020;Vaithilingam and Nair, 2007). Pietschmann and Walker (2011) conducted a study that estimated the funds generated from organized crimes and drug trafficking.…”

Contribution of Islamic Debt Financing in Entrepreneurship Promoting Financial Sector Transformation

“…The advantage of this approach is that medians are robust to outliers and nonnormal data. Several studies have used this model for panel data (Amjad et al, 2021;Sardar & Rehman, 2022). Ha1: The proposed constructs are suitable for FSD Ha2: The proposed constructs are suitable for ENT Though Islamic finance promotes entrepreneurship, the limited literature on quadratic effects pointed out that FSD -ENT should have a U-shaped relationship (Hurst & Lusardi, 2004;Pinto & Augusto, 2014).…”