The Effectiveness of White-Collar Crime Enforcement: Evidence from the War on Terror

71 Pages Posted: 15 Feb 2018

See all articles by Trung Nguyen

Trung Nguyen

Harvard University - Business School (HBS)

Multiple version iconThere are 2 versions of this paper

Date Written: November 7, 2017

Abstract

This paper studies the deterrent effect of criminal enforcement on white-collar criminal activities. Using the 9/11 terrorist attacks as a shock to the FBI's allocation of investigative resources and priorities, and variations in the Muslim population in the United States as a measure of geographic variations in the shock, I examine two questions: (1) Does the bureau's shift to counter-terrorism investigations after 9/11 lead to a reduction in the enforcement of laws targeting white-collar crime? (2) Does white-collar crime increase as a result of less oversight? Using a difference-in-differences estimation approach, I find that there is a significantly greater reduction in white-collar criminal cases referred by FBI field offices that shift their investigative focus away from white-collar crime to counter-terrorism. I also find that areas overseen by FBI field offices that shift their attention from white-collar crime to counter-terrorism experience a significantly greater increase in wire fraud, illegal insider trading activities, and fraud within financial institutions.

Keywords: Regulation, Fraud, White-Collar Crime, Enforcement

JEL Classification: G14, G18, H50, K22, K42, M48

Suggested Citation

Nguyen, Trung, The Effectiveness of White-Collar Crime Enforcement: Evidence from the War on Terror (November 7, 2017). Available at SSRN: https://ssrn.com/abstract=3117719 or http://dx.doi.org/10.2139/ssrn.3117719

Trung Nguyen (Contact Author)

Harvard University - Business School (HBS) ( email )

15 Harvard Way
Morgan 377
Boston, MA 02163
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
510
Abstract Views
2,154
Rank
102,325
PlumX Metrics