Do organizational and political–legal arrangements explain financial wrongdoing? Academic Article uri icon

abstract

  • The 2008 financial crisis was a systemic problem with deep-rooted structural causes that created opportunities to engage in financial malfeasance, a form of corporate wrongdoing. However, few quantitative studies exist on the effects of organizational and political-legal arrangements on financial malfeasance. In this paper, we examine the effects of organizational and political-legal arrangements that emerged in the 1990s in the FIRE sector (i.e., financial, insurance, and real estate) on financial malfeasance. Our historical contextualization demonstrates how changes in the political-legal arrangements facilitate the emergence of new corporate structures and opportunities for financial malfeasance. Our longitudinal quantitative analysis demonstrates that US FIRE sector corporations with a more complex organizational structure, larger size, lower dividend payment, and higher executive compensation are more prone to commit financial malfeasance.

altmetric score

  • 0.75

author list (cited authors)

  • Prechel, H., & Zheng, L. u.

citation count

  • 2

publication date

  • October 2016

publisher