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Blue-Collar Crime and Finance

Christian Olid, Alejandro Bernales, Diether Beuermann () and Douglas Cumming ()

No 9678, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: Relatively little is known about the effects of blue-collar crime (theft, robbery, vandalism or arson) on financial decisions. Previous literature has focused its attention either on 'regional' crime rates or the 'perception' of crime as business obstacles. Instead, we examine financing terms of 'individual' firms that 'effectively' experimented blue-collar crime events. We show that blue-collar crime worsens the access and conditions to external financing, which is unexpected since firms do not have to reveal to lenders that they suffered such crime incidents. We also find evidence that firm-information leakages may explain the negative effects of blue-collar crime on financing terms.

Keywords: blue-collar crime; finance; interest rates; loans (search for similar items in EconPapers)
JEL-codes: K14 G21 (search for similar items in EconPapers)
Date: 2020-10
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Handle: RePEc:idb:brikps:9678