Income inequality, social cohesion, and crime against businesses: Evidence from a global sample of firms

Sorin M. S. Krammer (), Addisu A. Lashitew, Jonathan P. Doh and Hari Bapuji
Additional contact information
Sorin M. S. Krammer: University of Exeter
Addisu A. Lashitew: McMaster University
Jonathan P. Doh: University of Villanova
Hari Bapuji: The University of Melbourne

Journal of International Business Studies, 2023, vol. 54, issue 2, No 9, 385-400

Abstract: Abstract Rising inequality is one of the grand societal challenges of our time. Yet, its effects on firms – including multinational enterprises (MNEs) – and their operations have not been widely examined by IB scholars. In this study, we posit that income inequality within a country is positively associated with the incidence and severity of crime experienced by businesses. Further, we propose that this relationship will be negatively moderated by social cohesion (in the form of greater societal trust and lower ethno-linguistic fractionalization) in these countries, such that social cohesion helps to offset the negative impacts of inequality on crime against businesses. We test these hypotheses using a comprehensive data set of 114,000 firms from 122 countries and find consistent support for our theses. Our findings, which are robust to different alternative variables, model specifications, instrumentation, and estimation techniques, unpack the intricate ways through which inequality affects businesses worldwide and the associated challenges to MNEs. They also offer important managerial and policy insights regarding the consequences of inequality and potential mitigation mechanisms.

Keywords: income inequality; crime against businesses; social cohesion; trust; fractionalization (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1057/s41267-022-00535-5 Abstract (text/html)
Access to full text is restricted to subscribers.

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:pal:jintbs:v:54:y:2023:i:2:d:10.1057_s41267-022-00535-5

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

DOI: 10.1057/s41267-022-00535-5

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().