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Corporate criminals in a market context: enforcement and optimal sanctions

Emmanuelle Auriol, Erling Hjelmeng and Tina Søreide
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Erling Hjelmeng: UiO - University of Oslo, Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration
Tina Søreide: Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration

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Abstract: By combining approaches from the economic theory of crime and of industrial organization, this paper analyzes optimal enforcement for three different forms of corporate misconduct that harm competition. The analysis shows why corporate crime is more harmful in large markets, why governments have a disinclination to sanction firms whose crime materializes abroad, and why leniency for those who self-report their crime is a complement, and not a substitute, to independent investigation and enforcement. As public authorities rely increasingly on self-reporting by companies to detect cartels, the number of leniency applications is likely to decline, and this is borne out by data. Upon a review of 50 cases of corporate liability from five European countries, competition law enforcement, governed by a unified legal regime, is more efficient than enforcement in bribery and money laundering cases, governed by disparate criminal law regimes. Sanction predictability and transparency are higher when governments cooperate closely with each other in law enforcement, when there are elements of supra-national authority, and when the offense is regulated by a separate legal instrument. Given our results, Europe would benefit from stronger supra-national cooperation in regulation and enforcement of transnational corporate crime, especially for the sake of deterrent penalties against crime committed abroad.

Keywords: Corporate liability; Corruption; Collusion; Antitrust; Money Laundering; Deterrence; Sanctions; Litigation (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-com, nep-law and nep-reg
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Published in European Journal of Law and Economics, 2023, 56 (2), pp.225-287. ⟨10.1007/s10657-023-09773-w⟩

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Journal Article: Corporate criminals in a market context: enforcement and optimal sanctions (2023) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04498703

DOI: 10.1007/s10657-023-09773-w

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