The potential of corruption based on Hofstede cultural dimensions and institutional quality: an international evidence

I Putu Mega Juli Semara Putra and Ranto Partomuan Sihombing

Journal of Financial Crime, 2023, vol. 31, issue 4, 823-836

Abstract: Purpose - This paper aims to investigate the risk of corruption in several countries based on the cultural dimensions of Hofstede and institutional quality (IQ). Design/methodology/approach - Data was collected from the Corruption Perception Index, Hofstede index and Worldwide Governance Indicators in 92 countries. Structural equation modeling based on partial least squares was used to test the proposed model. Findings - The findings support the fraud triangle theory, which states that high transparency of individualist cultural attitudes and institutional control mechanisms reduces the opportunities for fraud to occur. From this research, it is also concluded that culture is a factor that tends to be constant and difficult to change. Research limitations/implications - Research limitations include: First, it is limited to the number of samples, where the number of samples depends on the availability of data. However, only 92 countries intersect and have complete information. Second, this study only uses individualism from the Hofstede cultural dimension to see the risk of corruption. Practical implications - The result of this study implicates the policymakers in government agencies to increase IQ to reduce the risk of corruption. Originality/value - This is a preliminary study that discusses national culture (NC) and corruption, as well as the effect of the mediating variable, namely, the IQ. By including IQ, the authors hope that the impact of the effects of NC on corruption risk can be clarified.

Keywords: Corruption; Hofstede cultural dimensions; Institution quality; Structural equation modeling (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-02-2023-0039

DOI: 10.1108/JFC-02-2023-0039

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