48 Pages Posted: 30 Jun 2016 Last revised: 8 Aug 2016
Date Written: June 29, 2016
Using a proprietary dataset of 667 companies around the world that experienced white-collar crime we investigate what drives punishment of perpetrators of crime. We find a significantly lower propensity to punish crime in our sample, where most crimes are not reported to the regulator, relative to samples in studies investigating punishment of perpetrators in cases investigated by U.S. regulatory authorities. Punishment severity is significantly lower for senior executives, for perpetrators of crimes that do not directly steal from the company and at smaller companies. While economic reasons could explain these associations we show that gender and frequency of crimes moderate the relation between punishment severity and seniority. Male senior executives and senior executives in organizations with widespread crime are treated more leniently compared to senior female perpetrators or compared to senior perpetrators in organizations with isolated cases of crime. These results suggest that agency problems could partly explain punishment severity.
Keywords: white-collar crime, gender, fraud, penalties, corruption
JEL Classification: K41, K42, G34, M41, M51, J16
Suggested Citation: Suggested Citation
Healy, Paul M. and Serafeim, George, Who Pays for White-Collar Crime? (June 29, 2016). AAA 2017 Management Accounting Section (MAS) Meeting. Available at SSRN: https://ssrn.com/abstract=2801622 or http://dx.doi.org/10.2139/ssrn.2801622