To sin in secret is no sin at all: On the linkage of policy, society, culture, and firm characteristics with corporate scandals

Gregor Dorfleitner, Christian Kreuzer and Christian Sparrer

Journal of Economic Behavior & Organization, 2022, vol. 202, issue C, 762-784

Abstract: Using industry-based ratings which aggregate the scandals of a firm on a yearly basis for 5,700 companies from 44 countries, and a hybrid panel data model which allows us to separate the within-firm and the between-entity effects, our empirical approach reveals a broad spectrum of diverse political, cultural, societal, and firm-specific variables that are linked to patterns of unethical corporate behavior and their disclosure. We argue that companies tend to have fewer scandals if there is a high level of institutional pressure or if corporate scandals pose a high-level threat to organizational legitimacy. Moreover, in highly moral societies that closely monitor corporate behavior, more corporate scandals can be observed. Our results are further confirmed through the use of an alternative model which examines the number of scandals mentioned in the media in contrast to the scandal rating.

Keywords: Corporate controversy; Hybrid model; Institutional theory; Legitimacy theory; Corporate scandal; Janus phenomenon (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268122003080
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:202:y:2022:i:c:p:762-784

DOI: 10.1016/j.jebo.2022.08.027

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().