Should one hire a corrupt CEO in a corrupt country?

Mironov, Maxim

doi:10.1016/j.jfineco.2014.03.002

Cited by 86 publications

(23 citation statements)

References 23 publications

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“…By contrast, highly transparent reporting standards leave no room for information asymmetries. Prior literature using indices like TI Index, BEEPS, CPI, and CCI to measure corruption also follows this assumption (Wu, 2005;Garmaise and Liu, 2005;Karpoff et al, 2014;Mironov, 2015).…”

Section: Corruption Scorementioning

confidence: 95%

Corruption, Corporate Social Responsibility and Financial Constraints: International Firm‐level Evidence

Lopatta

Jaeschke

Tchikov

et al. 2016

European Management Review

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This study examines the relationship between firm‐level factors including corporate social responsibility (CSR) performance and financial constraints, and the firm‐level risk of corruption. Facing a measurement challenge referring to firm‐level risk of corruption, we define a corruption score based on corporate disclosures of corrupt activities. We show that, first, CSR performance is negatively related to the risk of corporate corruption. Second, a firm's vulnerability to financial constraints is positively related to the risk of corporate corruption. Third, the effects are particularly strong for firms with low board independence. Finally, we contribute to prior literature by developing the first firm‐level corruption score that is not only robust to prevalent corruption indices but is also applicable to any dataset and can be used for future research on firm‐level corruption. Moreover, the study provides new empirical evidence on firm‐level determinants that relate to corporate corruption risk.

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Section: Corruption Scorementioning

confidence: 95%

Corruption, Corporate Social Responsibility and Financial Constraints: International Firm‐level Evidence

Lopatta

Jaeschke

Tchikov

et al. 2016

European Management Review

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“…The transition has left various institutional voids and rent-seeking opportunities (Levin and Satarov [2000], Khanna, Palepu, and Bullock [2010], Browder [2015], Wong [2016]). Moreover, the release of state control of key productive resources to market exchanges can easily lead to corruption due to the practice of using social ties (guanxi in Chinese or blat in Russian) with politicians in business dealings (Fisman and Wang [2014], Jiang and Nie [2014], Mironov [2015], Schulze, Sjahrir, and Zakharov [2016]). The institutional voids and corruption not only present challenges to entrepreneurs in transitional economies, but also provide them opportunities to exploit.…”

Section: Enterprising In Transitionalmentioning

confidence: 99%

Public Attention and Auditor Behavior: The Case ofHurun Rich Listin China

Qing

2020

J of Accounting Research

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Adverse client publicity can entail regulatory scrutiny over audited financial statements and impose political costs on auditors. We use the changes in client publicity caused by their controlling owners' presence on the Hurun Rich List (the rich listing) in China to test the hypothesis that auditor conservatism increases with client publicity. Our evidence indicates auditors issue more adverse audit opinions to clients and charge higher fees following the rich listing events. Moreover, we observe that auditors strategically respond to clients with different attributes-for clients whose owners accumulated wealth in a more questionable manner, auditors choose more stringent audit reporting to better defend themselves from regulatory scrutiny; for clients without such attributes, auditors primarily rely on increasing audit fees to cope with any post-listing increase in audit risks. Our analyses also suggest the impacts of rich listings tend to be concentrated among large audit firms with stronger reputation concerns or among engagement auditors with more conservative reporting styles. By showing how auditors manage political risks associated with heightened public scrutiny, we contribute to both the auditing and political cost literature. JEL codes: D72; L82; L84; M42

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“…Surprisingly, however, the companies that they run are also more profitable. Mironov (2015) interprets this result with a complementarity effect. Since in Rome you have to do as the Romans do, the more successful CEOs in a corrupt country tend to have criminal records.…”

mentioning

confidence: 67%

“…A similar analysis was independently performed by Mironov (2015) with Russian data, as reported in this issue. CEOs with worse records of driving violations divert more money from their companies and pay more money under the table.…”

mentioning

confidence: 72%