Blue-Collar Crime and Finance
82 Pages Posted: 2 Mar 2018 Last revised: 11 Jan 2023
Date Written: December 24, 2022
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: Suggested Citation