The Geography of Financial Misconduct

52 Pages Posted: 4 Aug 2014 Last revised: 7 Aug 2021

See all articles by Christopher A. Parsons

Christopher A. Parsons

Marshall School of Business, University of Southern California

Johan Sulaeman

National University of Singapore (NUS) - Department of Finance

Sheridan Titman

University of Texas at Austin - Department of Finance; National Bureau of Economic Research (NBER)

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Date Written: July 2014

Abstract

We find that a firm's tendency to engage in financial misconduct increases with the misconduct rates of neighboring firms. This appears to be caused by peer effects, rather than exogenous shocks like regional variation in enforcement. Effects are stronger among firms of comparable size, and among CEOs of similar age. Moreover, local waves of financial misconduct correspond with local waves of non-financial corruption, such as political fraud.

Suggested Citation

Parsons, Christopher A. and Sulaeman, Johan and Titman, Sheridan, The Geography of Financial Misconduct (July 2014). Available at SSRN: https://ssrn.com/abstract=2475694

Christopher A. Parsons (Contact Author)

Marshall School of Business, University of Southern California ( email )

3670 Trousdale Pkwy
Los Angeles, CA 90089
United States

Johan Sulaeman

National University of Singapore (NUS) - Department of Finance ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore

HOME PAGE: http://sites.google.com/site/johansulaeman/

Sheridan Titman

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-232-2787 (Phone)
512-471-5073 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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