Paying the Piper: An Empirical Examination of Longer-Term Financial Consequences of Illegal Corporate Behavior

Longer-term performance effects of corporate illegality were investigated. Results show that firms experience lower accounting returns over five years and slower sales growth in the third through fifth year after a conviction. Stakeholders appear to paint all corporate wrongdoers with the same brush...

Full description

Saved in:
Bibliographic Details
Published in:Academy of Management journal 1997-02, Vol.40 (1), p.129-151
Main Authors: Baucus, Melissa S., Baucus, David A.
Format: Article
Language:English
Subjects:
Abnormal returns
Acquisitions & mergers
Antitrust
Business management
Business structures
Capital costs
Convictions
Corporate behavior
Correlation analysis
Costs
Efficient markets
Financial management
Financial performance
Fines & penalties
Hypotheses
Impact analysis
Institutional investments
Investors
Product liability regulation
Product recalls
Regression analysis
Research Notes
Researchers
Sales growth
Securities markets
Shareholders
Stock prices
Studies
Violations
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Longer-term performance effects of corporate illegality were investigated. Results show that firms experience lower accounting returns over five years and slower sales growth in the third through fifth year after a conviction. Stakeholders appear to paint all corporate wrongdoers with the same brush, ignoring the seriousness of illegalities, but responding strongly to multiple convictions for wrongdoing. Reduced financial performance does not deter subsequent illegality.
ISSN:0001-4273
0000-1427
1948-0989
DOI:10.5465/257023