CORPORATE LOBBYING AND FRAUD DETECTION
This paper examines the relation between corporate lobbying and fraud detection. Using data on corporate lobbying expenses between 1998 and 2004, and a sample of large frauds detected during the same period, we find that firms’ lobbying activities make a significant difference in fraud detection: compared to non-lobbying firms, firms that lobby on average have a significantly lower hazard rate of being detected for fraud, evade fraud detection 117 days longer, and are 38％ less likely to be detected by regulators. In addition, fraudulent firms on average spend 77％ more on lobbying than non-fraudulent firms, and spend 29％ more on lobbying during their fraud periods than during their non-fraud periods. The delay in detection allows managers to postpone the negative market reaction and to sell more of their shares.
corporate lobbying corporate fraud corporate governance
Frank Yu Xiaoyun Yu
Barclays Global Investors Kelley School of Business Indiana University
国际会议
广州
英文
1-47
2009-07-07（万方平台首次上网日期，不代表论文的发表时间）