Corporate Crime in European Emerging Markets

Ichiro Iwasaki and Evžen Kočenda

No 12132, CESifo Working Paper Series from CESifo

Abstract: We examine the corporate criminal records of 18,187 firms operating in 17 European emerging markets and empirically analyze the effects of board composition and national institutions on crime deterrence. Our analysis reveals that 872 firms (about 5% of the sample) committed 1,734 crimes over 2020-2023. We show that firms with larger boards and greater board independence are associated with higher incidences of corporate crime, suggesting that larger or nominally independent boards may not function effectively in emerging market contexts. In contrast, female leadership and board gender diversity do not exhibit significant deterrent effects, implying that gender inclusion alone may not suffice in these environments. In banks with an outside board chairman, the occurrence of corporate crime increases substantially. Importantly, stronger national institutions consistently correlate with lower crime rates, a pattern observed universally across European emerging markets, and boards in countries with stronger institutions appear more effective in deterring crime.

Keywords: corporate crime; board composition; board diversity; corporate governance; national institutions; banks; European emerging markets (search for similar items in EconPapers)
JEL-codes: D22 G34 K14 L22 M21 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-eur and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12132

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