White-Collar Crime Prevention Through Corporate Governance Mechanisms: Evidence from Emerging Markets
DOI:
https://doi.org/10.62383/iclehr.v2i1.49Keywords:
Corporate governance, Crime prevention, Emerging markets, Internal controls, White-collar crimeAbstract
White-collar crime poses significant threats to corporate integrity and economic stability, particularly in emerging markets where governance structures may be less developed. This study examines the effectiveness of corporate governance mechanisms in preventing white-collar crime in emerging market contexts. Using a mixed-methods approach combining quantitative analysis of 240 publicly listed companies across five emerging markets and qualitative case study analysis of 25 corporate fraud cases, this research evaluates the relationship between governance mechanisms and crime prevention effectiveness. The study reveals that strong board independence (β = -0.312, p < 0.001), robust internal audit functions (β = -0.267, p < 0.01), and comprehensive compliance programs (β = -0.298, p < 0.001) significantly reduce white-collar crime incidence. Companies with comprehensive governance frameworks show 58% lower fraud rates compared to those with weak governance structures. The research concludes that emerging markets can significantly reduce white-collar crime through strategic implementation of governance mechanisms, particularly emphasizing board independence, internal controls strengthening, and compliance culture development.
Downloads
References
ACAMS. (2021). Technology and financial crime prevention: A comprehensive guide. Association of Certified Anti-Money Laundering Specialists.
Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The origins of power, prosperity, and poverty. Crown Publishers.
Aggarwal, R., Erel, I., Stulz, R., & Williamson, R. (2009). Differences in governance practices between US and foreign firms: Measurement, causes, and consequences. Review of Financial Studies, 22(8), 3131–3169.
Aguilera, R. V., & Jackson, G. (2003). The cross-national diversity of corporate governance: Dimensions and determinants. Academy of Management Review, 28(3), 447–465.
Aguilera, R. V., & Jackson, G. (2010). Comparative and international corporate governance. Academy of Management Annals, 4(1), 485–556.
Alles, M., & Gray, G. L. (2016). Incorporating big data in audits: Identifying inhibitors and a research agenda to address those inhibitors. International Journal of Accounting Information Systems, 22, 44–59.
Aoki, M. (2001). Toward a comparative institutional analysis. MIT Press.
Appelbaum, D., Kogan, A., & Vasarhelyi, M. (2017). Big data and analytics in the modern audit engagement: Research needs. Auditing: A Journal of Practice & Theory, 36(4), 1–27.
Ararat, M., Black, B. S., & Yurtoglu, B. B. (2017). The effect of corporate governance on firm value and profitability: Time-series evidence from Turkey. Emerging Markets Review, 30, 113–132.
Armstrong, C. S., Jagolinzer, A. D., & Larcker, D. F. (2010). Chief executive officer equity incentives and accounting irregularities. Journal of Accounting Research, 48(2), 225–271.
Ashbaugh-Skaife, H., Collins, D. W., Kinney Jr, W. R., & LaFond, R. (2007). The effect of SOX internal control deficiencies and their remediation on accrual quality. The Accounting Review, 83(1), 217–250.
Association of Certified Fraud Examiners. (2024). Report to the Nations: Global study on occupational fraud and abuse. ACFE.
Baker, M., & Wurgler, J. (2013). Behavioral corporate finance: An updated survey. In G. M. Constantinides, M. Harris, & R. M. Stulz (Eds.), Handbook of the Economics of Finance (Vol. 2, pp. 357–424). Elsevier.
Baldwin, R., Cave, M., & Lodge, M. (2012). Understanding regulation: Theory, strategy, and practice. Oxford University Press.
Barth, J. R., Caprio Jr, G., & Levine, R. (2013). Bank regulation and supervision in 180 countries from 1999 to 2011 (NBER Working Paper No. 18733). National Bureau of Economic Research.
Basel Committee on Banking Supervision. (2015). Corporate governance principles for banks. Bank for International Settlements.
Battilana, J., Leca, B., & Boxenbaum, E. (2009). How actors change institutions: Towards a theory of institutional entrepreneurship. Academy of Management Annals, 3(1), 65–107.
Beatty, R. P., & Zajac, E. J. (1994). Managerial incentives, monitoring, and risk bearing: A study of executive compensation, ownership, and board structure in initial public offerings. Administrative Science Quarterly, 39(2), 313–335.
Bebchuk, L. A., & Weisbach, M. S. (2010). The state of corporate governance research. Review of Financial Studies, 23(3), 939–961.
Becker, G. S. (1968). Crime and punishment: An economic approach. Journal of Political Economy, 76(2), 169–217.
Bekaert, G., & Harvey, C. R. (2017). Emerging equity markets in a globalizing world. Journal of Emerging Market Finance, 16(1), 1–50.
Bell, T. B., Peecher, M. E., & Solomon, I. (2005). The 21st century public company audit: Conceptual elements of KPMG's global audit methodology. KPMG International.
Benson, M. L., & Simpson, S. S. (n.d.). White-collar crime prevention through corporate governance mechanisms: Evidence from emerging markets (Unpublished manuscript).
Rasyid, M. F. F. (n.d.). White-collar crime prevention through corporate governance mechanisms: Evidence from emerging markets [Unpublished manuscript]. Jurusan Pidana, Fakultas Hukum, Institut Ilmu Sosial dan Bisnis Andi Sapada Parepare.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Proceeding of the International Conference on Law and Human Rights
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
