Abstract
We examine the reputational and persistent costs of blue-collar crime against firms. Blue-collar crime negatively affects firms' reputation regarding credit risk, which persists over time and worsens future access to, and the conditions of, external financing (even if firms are financially healthy again in the future, and even if current crime events are unrelated to future crime incidence). Blue-collar crime does not need to be disclosed to lenders, but revelation is more likely among firms with more employees and in smaller communities, due to potential information leakages. However, the CEO's work experience mitigates the impact of blue-collar crime on future financing conditions.
| Original language | English |
|---|---|
| Article number | 101732 |
| Number of pages | 20 |
| Journal | Journal of International Financial Markets, Institutions and Money |
| Volume | 83 |
| Early online date | 7 Jan 2023 |
| DOIs | |
| Publication status | Published - Mar 2023 |
Bibliographical note
Funding Information:The authors wish to thank participants in the seminars at Central Bank of Mexico, York University, the Inter-American Development Bank and Universidad de Chile. They are grateful to Sofia Johan, Patricia Le-Bert, Florencio Lopez de Silanes, Henry Mooney, David Rosenblatt, Andrei Shleifer, Marcela Valenzuela and Patricio Valenzuela for their insightful comments. Alejandro Bernales acknowledges financial support from Fondecyt project #1231660. Douglas Cumming is indebted to the Social Sciences and Humanities Research Council of Canada for generous financial support. Khamal Clayton provided superb research assistance. All errors are the authors’ own.
Publisher Copyright:
© 2022 Elsevier B.V.
Keywords
- Blue-Collar Crime
- CEO's Work Experience
- Credit Risk
- External Financing
- Information Leakages
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
