Firm Compliance With Social Insurance Obligations Where There is a Weak Surveillance and Enforcement Mechanism: Empirical Evidence from Shanghai

20 Pages Posted: 5 Nov 2007

See all articles by Pushkar Maitra

Pushkar Maitra

Monash University - Department of Economics

Russell Smyth

Monash University - Department of Economics

Ingrid L. Nielsen

Deakin University

Chris Nyland

Monash University - Department of Management

Cherrie Zhu

Monash University

Abstract

This article examines why firms in Shanghai comply or over-comply with social insurance obligations in a regulatory environment where the expected punishment for non-compliance is low. Our first finding is that firms found to be in non-compliance in the first audit in 2001 were moved into a separate violation category and the probability of being re-audited in 2002 was significantly higher if the firm was in that category. Our second main result is that, across the board, firms which were re-audited continued to underpay in 2002 but the extent of underpayment was significantly reduced.

Suggested Citation

Maitra, Pushkar and Smyth, Russell and Nielsen, Ingrid L. and Nyland, Chris and Zhu, Cherrie Jiuhua, Firm Compliance With Social Insurance Obligations Where There is a Weak Surveillance and Enforcement Mechanism: Empirical Evidence from Shanghai. Pacific Economic Review, Vol. 12, Issue 5, pp. 577-596, December 2007, Available at SSRN: https://ssrn.com/abstract=1027090 or http://dx.doi.org/10.1111/j.1468-0106.2007.00373.x

Pushkar Maitra (Contact Author)

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia
61 3 9905 5832 (Phone)
61 3 9905 5476 (Fax)

Russell Smyth

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia

Ingrid L. Nielsen

Deakin University ( email )

70 Elgar Road
Burwood, Victoria 3125
Australia

Chris Nyland

Monash University - Department of Management ( email )

Wellington Road
Clayton, Victoria 3168
Australia

Cherrie Jiuhua Zhu

Monash University ( email )

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