Blue-Collar Crime and Finance

82 Pages Posted: 2 Mar 2018 Last revised: 11 Jan 2023

See all articles by Alejandro Bernales

Alejandro Bernales

Universidad de Chile

Diether W. Beuermann

University of Maryland - College Park; Durham Business School; Inter-American Development Bank (IADB); Universidad de Lima - Facultad de Economia

Douglas J. Cumming

Florida Atlantic University; Birmingham Business School; European Corporate Governance Institute (ECGI)

Christian Olid

University of Chile

Date Written: December 24, 2022

Abstract

We examine the reputational and persistent costs of blue-collar crime against firms. Blue-collar crime negatively affects firms' reputation regarding credit risk, which persists over time and worsens future access to, and the conditions of, external financing (even if firms are financially healthy again in the future, and even if current crime events are unrelated to future crime incidence). Blue-collar crime does not need to be disclosed to lenders, but revelation is more likely among firms with more employees and in smaller communities, due to potential information leakages. However, the CEO's work experience mitigates the impact of blue-collar crime on future financing conditions.

Keywords: Blue-Collar Crime, External Financing, Credit Risk, Information Leakages, CEO's Work Experience.

JEL Classification: G14, G21, G32, K42, 016.

Suggested Citation

Bernales, Alejandro and Beuermann, Diether Wolfgang and Cumming, Douglas J. and Olid, Christian, Blue-Collar Crime and Finance (December 24, 2022). Available at SSRN: https://ssrn.com/abstract=3127862 or http://dx.doi.org/10.2139/ssrn.3127862

Alejandro Bernales

Universidad de Chile ( email )

Diagonal Paraguay 257
Santiago
Chile

HOME PAGE: http://www.alejandrobernales.com

Diether Wolfgang Beuermann (Contact Author)

University of Maryland - College Park ( email )

College Park, MD 20742
United States
240-838-9376 (Phone)

HOME PAGE: http://www.econ.umd.edu/~beuermann

Durham Business School ( email )

Mill Hill Lane
Durham, Durham DH1 3LB
United Kingdom

HOME PAGE: http://www.dur.ac.uk/dbs

Inter-American Development Bank (IADB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States
202-623-2172 (Phone)

HOME PAGE: http://www.iadb.org

Universidad de Lima - Facultad de Economia ( email )

Av. Javier Prado Este s/n
Lima, Lima 33
Peru

HOME PAGE: http://www.ulima.edu.pe

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://sites.google.com/view/douglascumming/bio?authuser=0

Birmingham Business School ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://https://ecgi.global/users/douglas-cumming

Christian Olid

University of Chile ( email )

Pío Nono Nº1, Providencia
Santiago, R. Metropolitana 7520421
Chile

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