Economics at your fingertips  

Assessing the Effects of Anti-corruption Law on Entrepreneurial Finance: Evidence from Latin America

Francesca Battaglia, Marika Carboni, Antonella Francesca Cicchiello and Stefano MonferrÃ

Journal of Emerging Market Finance, 2021, vol. 20, issue 1, 48-78

Abstract: Corruption normally causes distrust among investors and can negatively affect investments. Particularly in Latin America, decline of investments is one of the most significant problems. In such a context, anti-corruption laws can both fight corruption and promote business, restoring investors’ trust. In this article, we ask whether the introduction of an anti-corruption framework affecting both the public and private spheres is able to increase investors’ confidence in a new form of investment, that is, equity crowdfunding. By using a unique database, with combined information from different platforms in Brazil, Chile and Mexico, we study the population of 492 projects between 2013 and 2017. Implementing a set of linear probability regressions, we find that the new Mexican anti-corruption law has increased the probability of success of equity crowdfunding projects in this country, compared to Brazilian and Chilean projects, suggesting the existence of a causal relation between anti-corruption rules and investments in a highly perceived corrupt environment further characterised by a low level of investor protection. JEL Classification: G23, G28, K22, L26

Keywords: Corruption; regulation; equity crowdfunding; entrepreneurial finance; Latin America (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (text/html)

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:

DOI: 10.1177/0972652720932783

Access Statistics for this article

More articles in Journal of Emerging Market Finance from Institute for Financial Management and Research
Bibliographic data for series maintained by SAGE Publications ().

Page updated 2022-07-02
Handle: RePEc:sae:emffin:v:20:y:2021:i:1:p:48-78