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4th OBEGEF International Conference
Interdisciplinary Insights on Fraud and Corruption 2017
(I2FC2017)
The Social and Economic Impact of Fraud and Corruption
Conference Booklet
25 November 2017
Title I2FC 2017: 4th OBEGEF International Conference’s Booklet
Editor Aurora A.C. Teixeira
Edition Observatório de Economia e Gestão da Fraude (OBEGEF)
Year 2017
Index of Contents
WELCOME ADDRESS ................................................................................................................................... 1
KEYNOTE SPEAKERS .................................................................................................................................... 2
SCIENTIFIC COMMITTEE .............................................................................................................................. 4
LOCAL ORGANIZING COMMITTEE ............................................................................................................... 5
CHAIRS ........................................................................................................................................................ 6
DISCUSSANTS .............................................................................................................................................. 7
PRACTICAL INFORMATION .......................................................................................................................... 8
CONFERENCE VENUE .......................................................................................................................................... 8 HOW TO GET TO PORTO FROM THE AIRPORT BY TAXI ................................................................................................. 9 HOW TO GET TO PORTO FROM THE AIRPORT BY METRO ............................................................................................ 9 ACCOMMODATION – HOTELS WITH SPECIAL RATES FOR I2FC2017’S DELEGATES ......................................................... 10
INTERESTING PLACES TO VISIT IN PORTO AND NORTHERN PORTUGAL ..................................................... 11
HISTORICAL CENTRE ......................................................................................................................................... 11 CASA DA MÚSICA ............................................................................................................................................ 11 SERRALVES FOUNDATION AND MUSEUM .............................................................................................................. 11 FURTHER INFORMATION ON PORTO ..................................................................................................................... 11
CONFERENCE PROGRAM AT A GLANCE ..................................................................................................... 12
DETAILED CONFERENCE PROGRAM........................................................................................................... 13
LIST OF THE ABSTRACTS OF THE SESSION PAPERS PRESENTED AT THE CONFERENCE ................................ 17
OPENING PLENARY SESSION ..................................................................................................................... 18
CORRUPTION IN INTERNATIONAL BUSINESS ........................................................................................................... 18
S1. SOCIAL, POLITICAL AND CULTURAL ASPECTS OF CORRUPTION ............................................................ 19
IS THERE A VICIOUS CYCLE BETWEEN CORRUPTION AND DEMOCRACY AT THE GLOBAL LEVEL? [S1.1] ................................. 19 THE SOCIAL AND ORGANIZATIONAL ASPECTS OF CORRUPTION AND ANTICORRUPTION [S1.2] ........................................ 19 CULTURAL CORRUPTION: LESSONS FROM THE PETROBRAS SCANDAL CASE [S1.3] ......................................................... 20 DO YOU THINK THAT CORRUPTION CAN, SOMETIMES, BENEFIT THE POPULATION? SOME INSIGHTS INTO PORTUGUESE
LAYPEOPLE’S [S1.4] ......................................................................................................................................... 20
S2. FRAUD AND CORRUPTION................................................................................................................... 21
AN OVERVIEW OF RELATION BETWEEN CORPORATE GOVERNANCE AND TAX PLANNING [S2.1] ......................................... 21 INDEX OF PERCEPTION OF FRAUD IN PORTUGAL [S2.2] ............................................................................................ 22 THE TYPOLOGY OF AGENCY MODELS OF CORRUPTION AND THE TOTALITARIAN CORRUPTION CASE [S2.3] ....................... 22 SECRECY AND TAX-FLIGHT: THE ACCRETION OF GLOBAL SHADOWS [S2.4] ................................................................. 23
S3. DETECTION OF FRAUD AND CORRUPTION ........................................................................................... 23
THE WATCHDOGS ARE NOT BARKING! DECONSTRUCTING ORGANISATIONAL CORRUPTION IN INTERNATIONAL DEVELOPMENT
PROJECTS. - A CASE STUDY OF FIRMS SANCTIONED BY THE AFRICAN DEVELOPMENT BANK [S3.1] .................................... 23 LIMITATION OF COMPLIANCE FRAMEWORKS IN FINANCIAL CRIME DETECTION: FROM KNOW YOUR CLIENT (KYC) TO KNOW
YOUR NETWORK (KYN) [S3.2] .......................................................................................................................... 24 UNDERSTANDING RECURRING CORRUPTION: A DESCRIPTIVE PROFILE OF RECIDIVISTS [S3.3] ......................................... 25
S4. CORRUPTION IN HIGHER EDUCATION ................................................................................................. 25
A REVIEW OF RESEARCH ON CORRUPTION AND ITS PHILOSOPHICAL ASSUMPTIONS IN TOP INTERNATIONAL BUSINESS AND
MANAGEMENT JOURNALS [S4.1] ........................................................................................................................ 25 REFLECTIONS ON CORRUPTION AND INSTITUTIONAL CHANGES IN THE HIGHER EDUCATION CONTEXT: A RESEARCH AGENDA
[S4.2] ........................................................................................................................................................... 26 ETHICAL PERCEPTIONS OF CORPORATE BEHAVIOUR BY BUSINESS AND ECONOMICS STUDENTS: EXPLORATORY STUDY ON THE
RELATION WITH PERCEPTIONS OF ACADEMIC MISCONDUCT [S4.3] ............................................................................. 27
S5. SHADOW ECONOMY ........................................................................................................................... 27
ASSESSMENT OF THE VAT GAP DUE SHADOW ECONOMY WITHIN EU [S5.1] ............................................................... 27 THE UNDERGROUND ECONOMY, UNEMPLOYMENT AND THE ACCURACY OF ESTIMATES: THE CASE OF SPAIN [S5.2] .............. 28 TIP OF THE ICEBERG: ESTIMATING THE MAGNITUDE OF FRAUD AND CORRUPTION IN THE SHADOW ECONOMY [S5.3]......... 28 SHADOW ECONOMY IN THE EU [S5.4] ................................................................................................................ 29
S6. CORRUPTION AND ECONOMIC GROWTH ............................................................................................ 29
THE IMPACT OF CORRUPTION ON ECONOMIC GROWTH OF EMERGING ECONOMIES [S6.1] ............................................ 29 SOCIAL AND ECONOMIC DETERMINANTS OF CORRUPTION: A PANEL DATA ANALYSIS FOR 25 EUROPEAN AND OECD
MEMBERS [S6.2] ............................................................................................................................................ 30 GLOBALIZATION, ECONOMIC DEVELOPMENT, AND CORRUPTION: A CROSS-LAGGED CONTINGENCY PERSPECTIVE [S6.3] .... 31 CORRUPTION AND ECONOMIC GROWTH REVISITED [S6.4] ...................................................................................... 31
WHERE DO OUR (CO)AUTHORS COME FROM? .......................................................................................... 32
Index of Authors
(By alphabetic order of the first name)
Alex MOURMOURAS (International Monetary Fund - IMF) 13; 28
Alvaro CUERVO-CAZURRA (Northeastern University) 10; 15
Ana Melissa FERREIRA (DEGEIT, Universidade de Aveiro) 10; 16
Ana Patrícia PINHO (Faculdade de Economia, Universidade do Porto, Portugal) 13; 26
Andrei IVANOV (Graduate School of Management at St. Petersburg University, Russia) 11; 19
Camila Lee PARK (ESCP Europe, Paris, France) 10; 17
Carla SÁ (Escola de Economia e Gestão, Universidade do Minho) 12; 24
Cristina SÁ (School of Technology and Management of Leiria (ESTG), Polytechnic Institute of Leiria, Portugal) 11; 18
David JANCSICS (School of Public Affairs, San Diego State University – Imperial Valley Campus San Diego, USA) 10; 16
Fatih SÖNMEZ (Department of Gestão e Economia, Universidade da Beira Interior, Covilha, Portugal) 13; 27
Gabrielle POESCHL (Faculty of Psychology and Educational Sciences, Univ. of Porto, Portugal) 10; 12; 17
Helena ALVES (School of Technology and Management of Leiria (ESTG), Polytechnic Institute of Leiria, Portugal) 11; 18
Ignacio Mauleón TORRES (Department of Fundamentos del Análisis Económico, University Rey Juan Carlos, Spain) 12; 25
Jordi SARDÀ (Department of Economics, University Rovira i Virgili, Tarragona, Spain) 12; 25
Jorge ALVES (OBEGEF) 11; 19
José António MOREIRA (OBEGEF) 11; 12; 19
José R. PIRES MANSO (Department of Gestão e Economia, Universidade da Beira Interior, Covilha, Portugal) 13; 27
Kelly NOGUEIRA-RODRIGUES (Faculty of Psychology and Educational Sciences, Univ. of Porto, Portugal) 10; 17
Leyla ORUDZHEVA (Department of Management, University of North Texas, Denton TX, USA) 11; 22
Luís MENDES (Univ. Beira Interior, CEFAGE-UBI) 12; 23
Maksym IVANYNA (Joint Vienna Institute, Austria) 13; 28
Manjula SALIMATH (Department of Management, University of North Texas, Denton TX, USA) 11; 22
Manuel NOGUEIRA (OBEGEF) 11; 19
Mara MADALENO (DEGEIT, Universidade de Aveiro; GOVCOPP) 10; 16
Marieta VALENTE (Escola de Economia e Gestão, Universidade do Minho, Portugal) 12; 24
Mário FRANCO (Univ. Beira Interior, CEFAGE-UBI) 12; 23
Marius-Cristian FRUNZA (LABEX ReFi, ESCP, Paris, France; Ural University, URFU, Ekateringurg, Russian Federation) 21; 24
Mauro Fracarolli NUNES (ESCP Europe, Paris, France) 10; 17
Michelle GALLANT (University of Manitoba, Canada) 11; 20
Nuno SOARES (Departamento de Engenharia e Gestão Industrial and Cef.UP, Universidade do Porto) 12; 24
Orlando MASCARENHAS (OBEGEF) 11; 19
Óscar AFONSO (Univ. do Porto, CEFAGE-UBI, OBEGEF) 19; 23
Päivi KARHUNEN (Center for Markets in Transition, Aalto University School of Business, Helsinki, Finland) 12; 22
Paulo VASCONCELOS (OBEGEF) 11; 12; 19
Pedro Cosme VIEIRA (Faculdade de Economia, Universidade do Porto, Portugal) 13; 26
Pedro NEVES (Univ. Beira Interior, CEFAGE-UBI) 12; 13; 23
Peter RANGAZAS (Indiana University, USA) 13; 28
Petter GOTTSCHALK (BI Norwegian Business School, Norway) 12; 25
Philippe ADAIR (ERUDITE research center, University Paris-Est Créteil, France) 12; 26
Rachida AÏSSAOUI (Department of Management, College of Business, Ohio University, USA) 13; 28
Raquel RIBEIRO (OBEGEF) 11; 19
Rostislav HALIPLII (CES, Paris I Sorbonne University, Paris, France) 11; 21
Sanjeev NARRAINEN (Institute of Criminal Justice Studies – University of Portsmouth, Portsmouth, UK) 11; 20
Sara BATISTA (DEGEIT, Universidade de Aveiro) 10; 16
Sílvia SOUSA (Escola de Economia e Gestão, Universidade do Minho) 12; 24
Tiago SEQUEIRA (Univ. Beira Interior, CEFAGE-UBI) 11; 12; 13; 23
1
Conference Chair
Aurora A.C. Teixeira
Universidade do Porto, Faculdade de
Economia, CEF.UP; INESC Tec; OBEGEF
Welcome Address
Dear colleagues,
I am very pleased and honoured to welcome you all to the 4th Interdisciplinary Insights on Fraud and
Corruption (I2FC 2017). The conference is hosted by OBEGEF, the Observatory in Economics and Management
of Fraud.
In recent years, solid empirical evidence has been gathered on the social and economic costs of fraud and
corruption. It has been shown corruption deters investment (both domestic and foreign), lessens growth,
curbs trade, distorts the size and composition of government expenditure, deteriorates the financial system,
and fortifies the underground economy. Moreover, and worrisomely, a strong connection has been
established between corruption and increasing levels of poverty and income inequality. Regarding fraud, the
Association of Certified Fraud Examiners’ (ACFE) reports that the typical organization loses a median of 5% of
revenues each year due to fraud. Besides lost revenue, indirect costs such as low employee morale, decreased
productivity, ruined reputations and damaged brand images, need also to be taken into account. Given this
context, citizens, in general, and public authorities, regulators, and companies of all sizes, in particular, need
to consider and be more knowledgeable about these matters taking proactive measures to help mitigate the
risks and negative consequences involved. Thus, we decided this year to elect “The social and economic
impact of fraud and corruption as the conference’s main theme.
This year’s conference opens up with two outstanding colleagues - Alvaro Cuervo-Cazurra, Professor of
International Business and Strategy at Northeastern University (US), and Ana Teresa Tavares-Lehmann,
Portugal’s State Secretary of Industry and Professor of International Business at FEP, University of Porto. They
impeccably combine two greatly valued characteristics: outstanding academic performance and highly-
respected public policy interventions and consultancy skills on their areas of expertise.
The scientific program encompasses 22 papers, co-authored by 44 researchers affiliated in institutions
located in 10 distinct countries: Austria, Canada, Finland, France, Norway, Portugal, Russia, Spain, UK, and
the US. The communications cover a wide set of topics, most notably: Corruption and economic growth,
Corruption in Higher Education, Fraud and corruption, Detection of fraud and corruption, Shadow economy,
and Social, political and cultural aspects of corruption.
I expect the conference provides you with an opportunity to exchange scientific ideas, stimulate new
research, and new contacts for closer co-operation, so that we can, together, contribute to rising awareness
and expectations of civil society, developing the capacity to fight fraud and corruption, promoting
accountability through transparency (access to information), and focusing on prevention rather than
enforcement. I believe the discussions held at the conference will provide important insights and, hopefully,
a path forward.
I wish you every success and a very pleasant stay in Porto,
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Keynote speakers
(by alphabetic order of the first name)
ALVARO CUERVO-CAZURRA | Professor of International Business and Strategy, Northeastern University
Bio
Professor of International Business and Strategy and the Lloyd J. Mullin Research Fellow at the
D'Amore-McKim School of Business at Northeastern University. Before joining Northeastern he was
a faculty member at the University of South Carolina and at the University of Minnesota, and visiting
professor at Cornell University; and was the Patrick F. and Helen C. Walsh Research Professor and
the Robert Morrison Research Fellow at the D'Amore-McKim School of Business, Northeastern
University; John H. Dunning Fellow at Henley Business School, Reading University; Non-Resident
Senior Research Fellow at the Institute for Emerging Market Studies, Moscow School of
Management SKOLKOVO; and Honorary Member, Montreal Local-Global Research Group.
Selected journal articles, books and book chapters:
Cuervo-Cazurra A. (Ed). 2017. State-Owned Multinationals: Governments in Global Business.
Palgrave. (forthcoming)
Cuervo-Cazurra, A. 2016. Corruption in international business. Journal of World Business, 51: 35-
49.
Cuervo-Cazurra, A. 2016. Business groups in Spain: Regulation and ideology drivers. In Colpan, A.
M. and Hikino, T. (Eds) Business Groups in the West: The Evolutionary Dynamics of Big
Business. Oxford: Oxford University Press. (forthcoming)
Cuervo-Cazurra, A. Inkpen, A., Musacchio, A. and Ramaswamy, K. 2014. Governments as owners:
State-owned multinational companies. Journal of International Business Studies, 45: 919-
942.
Cuervo-Cazurra, A. 2014. Transparency and corruption. In Forssbæck, J. and Oxelheim, L. (Eds.), The
Oxford Handbook of Economic and Institutional Transparency. New York: Oxford University
Press.
Cuervo-Cazurra, A. 2014. Corruption. In Cooper, C. (Ed.), Wiley Encyclopedia of Management. 3rd
edition. Marblehead, MA: John Wiley & Sons.
3
ANA TERESA TAVARES-LEHMANN | Portugal’s State Secretary of Industry
Bio
Associate Professor of Economics at the University of Porto, Portugal, and former (2014-2017) CEO
of InvestPorto. She is a Fellow and former President of the European International Business
Academy. She was Vice-President of the Commission for Regional Coordination and Development
of the North (CCDR-N) between 2008 and 2012, chaired the Management Authority of the
Operational Program for Territorial Cooperation Territorial Atlantic from 2009 to 2012 and was pro-
rector of the University of Porto between 2006 and 2008, with responsibilities in the areas of
strategic planning, relations and business interests.
Selected journal articles, books and book chapters:
Tavares Lehmann, A.T., Lehmann, F. (2017). Outward direct investment by Chinese state-owned
enterprises: Can host country policy act as a country-specific advantage? Competitiveness
Review, 27 (3), pp. 231-252.
Tavares-Lehmann, A.T., Toledano, P., Johnson, L. and Sachs, L. (eds.) (2016). Rethinking Investment
Incentives: Trends and Policy Options. Columbia University Press.
Teixeira, A.A.C., Tavares-Lehmann, A.T. (2014). Human capital intensity in technology-based firms
located in Portugal: Does foreign ownership matter? Research Policy, 43 (4), pp. 737-748.
Tavares-Lehmann, A.T., Coelho, Â., Lehmann, F. (2012). Taxes and foreign direct investment
attraction: A literature review. Progress in International Business Research, 7, pp. 89-117.
Van Tulder, R., Tavares-Lehmann, A.T., Verbeke, A. (2011). Introduction: Entrepreneurship research
in international business studies. Progress in International Business Research, 6, pp. 1-17.
4
Scientific Committee
Chair of the Scientific Committee
Carlos PIMENTA| Faculdade de Economia, Universidade do Porto; OBEGEF
Other members of the Scientific Committee (by alphabetic order)
ANTÓNIO MAIA | Conselho de Prevenção da Corrupção; OBEGEF
José António MOREIRA | Faculdade de Economia, Universidade do Porto; OBEGEF
MARIANA COSTA| University of Porto and OBEGEF
ORLANDO MASCARENHAS| OBEGEF
Óscar AFONSO | Faculdade de Economia, Universidade do Porto; CEFAGE-UBI; OBEGEF
Pedro Cunha NEVES | CEFAGE-UBI, Universidade da Beira Interior; OBEGEF
Tiago SEQUEIRA | CEFAGE-UBI, Universidade da Beira Interior; OBEGEF
5
Local Organizing Committee
Conference Chair
AURORA TEIXEIRA| CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Tec; OBEGEF
Conference Treasurer
MARIA DO CÉU RIBEIRO | OBEGEF
Other members of the Local Organizing Committee
MANUEL NOGUEIRA | Universidade de Coimbra and CISSS
MARIANA COSTA| Universidade do Porto and OBEGEF
PAULO VASCONCELOS | Faculdade de Economia, Universidade do Porto and OBEGEF
Conference Assistants
ANA FILIPA CAMPOS | Universidade do Porto, Faculdade de Economia
ANDRÉ SILVA | Universidade do Porto, Faculdade de Economia
GABRIELA PEREIRA | Universidade do Porto, Faculdade de Economia
INÊS COELHO | Universidade do Porto, Faculdade de Economia
JOÃO DIAS | Universidade do Porto, Faculdade de Economia
JOSÉ VERÓNICO | Universidade do Porto, Faculdade de Economia
MARIA CRISPIM | Universidade do Porto, Faculdade de Economia
MARINA ARMANIOUS | Universidade do Porto, Faculdade de Economia
TÂNIA COSTA DA SILVA | Universidade do Porto, Faculdade de Economia
Marketing and Media Consultants
OLGA CRUZ| Essência Completa
6
Chairs
(By alphabetic order of the first name)
Alda CORREIA | OBEGEF
André VIEIRA DE CASTRO | OBEGEF
António MAIA | Conselho de Prevenção da Corrupção; OBEGEF
Gabrielle POESCHL | Faculdade de Psicologia e de Ciências da Educação, Universidade do Porto
Óscar AFONSO | Faculdade de Economia, Universidade do Porto; CEFAGE-UBI; OBEGEF
Tiago SEQUEIRA | CEFAGE-UBI, Universidade da Beira Interior; OBEGEF
7
Discussants
(By alphabetic order of the first name)
Alda CORREIA | OBEGEF
André VIEIRA DE CASTRO | OBEGEF
António DIAS | Universidade de Trás-os-Montes e Alto Douro; CETRAD; OBEGEF
António MAIA | Conselho de Prevenção da Corrupção; OBEGEF
Aurora TEIXEIRA | CEF.UP, Faculdade de Economia, Universidade do Porto; INESC TEC; OBEGEF
Bruno REYNAUD DE SOUSA | Faculdade de Letras, Universidade do Porto; IJP
José António MOREIRA |Faculdade de Economia, Universidade do Porto; OBEGEF
Mariana COSTA | Universidade do Porto; CIJE; OBEGEF
Nuno GUITA | ALIGN’IN; OBEGEF
Óscar AFONSO | Faculdade de Economia, Universidade do Porto; CEFAGE-UBI; OBEGEF
Paulo VASCONCELOS | Faculdade de Economia, Universidade do Porto; OBEGEF
Pedro Cunha NEVES | CEFAGE-UBI, Universidade da Beira Interior; OBEGEF
Tiago SEQUEIRA | CEFAGE-UBI, Universidade da Beira Interior; OBEGEF
8
Practical Information
Conference venue
The Conference will take place at: Atmosfera M
5th Floor
Rua Júlio Dinis, nº 158/160, 4050-012 Porto
The two conference rooms are equipped with PCs and projectors. You only need to bring
your pen drive/USB with your presentation.
Each session lasts about 100 minutes. The Session Chair will organize and control time (on
average, for a 4 paper session you have approximately 15 minutes presentation and 5
minutes discussion, and 5 minutes questions).
Internet wireless connection will be available for every I2FC Delegates in Rede Eventos M
9
How to get to Porto from the airport by taxi
From the airport to the city the best options are taxi (typical cost to the city center 18-20€, variable with hotel
location) or Metro. Taxi services are available by calling the following number: (+351) 911907533; (+351)
934944651; (+351) 969520399
How to get to Porto from the airport by Metro
The nearest station to the Conference Venue is Casa da Música, on the Violet Line, see map below
Website: www.metrodoporto.pt
To travel in Metro do Porto a ticket called "Andante" is required; this ticket must be recharged with trips,
according to the areas travelled.
When using the Metro please note that if you have to change lines you have to validate the ticket each time;
each user needs to buy a card called ANDANTE, which you can charge with one or more journeys, cost
depending on the number of zones.
10
Accommodation – Hotels with special rates for I2FC2017’s delegates
Hotel Ibis Porto São João – 2*
HF Tuela Porto – 3*
HF Fénix Porto – 4*
Hotel Eurostars Porto – 4*
HF Ipanema Porto – 4*
Hotel Teatro – 4*
Hotel da Música – 4*
Hotel InterContinental Porto - Palácio das Cardosas – 5*
HF Ipanema Park – 5*
See http://www.i2fc2017.com/hotels.html for further information.
11
Interesting places to visit in Porto and Northern Portugal
Historical Centre
Casa da Música
Casa da Música was conceived to mark 2001, the year in which
Porto was Cultural Capital of Europe, and it is the first new
building in Portugal to be entirely dedicated to music - to the
presentation and public enjoyment of music, to music education
and to the creation of music.
The project took shape in 1999 after the Rem Koolhaas& Ellen van
Loon - Office for Metropolitan Architecture won the international
architectural competition. Casa da Música opened its doors to the
public on April 15th, 2005.
Besides concerts, recitals and other types of performance, Casa
da Música also organises events for musicians and musicologists
and invests in research into the origins of Portuguese music.
Serralves Foundation and Museum
The Serralves Foundation is a European cultural institution
serving the national community, whose mission is to raise the
general public's awareness concerning contemporary art and
the environment. The Foundation pursues its mission via the
Museum of Contemporary Art as a multi-disciplinary centre,
the Park as a natural heritage site ideally suited for
environmental education and entertainment activities and the
Auditorium as a centre for reflection and debate on issues
facing contemporary society.
Further information on Porto
http://www.visitporto.travel/Visitar/Paginas/default.aspx
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Conference Program at a glance
09h00-09h30: Registration
09h30-11h00: Opening + Plenary sessions
11h00-11h20: Coffee break
11h20-13h00: Parallel Sessions S1 Social, political and cultural
aspects of corruption S2 Fraud and corruption
13h00-14h30: Lunch
14h30-16h10: Parallel Sessions S3 Detection of fraud and
corruption S4 Corruption in Higher
Education
16h10-16h30: Coffee break
16h30-18h10: Parallel Sessions S5 Shadow Economy S6 Corruption and economic
growth
18h10: Closing session - Best paper award + Closing address
18h30: Farewell cocktail party
13
Detailed Conference Program
09h00-09h30: Registration
09h30-11h00: Opening Session Room 1
Welcome address, Aurora TEIXEIRA (Conference Chair)
Opening: Ana Teresa TAVARES-LEHMANN (State Secretary of Industry Portugal)
Keynote speech: Alvaro CUERVO-CAZURRA (Professor of International Business and Strategy and the Lloyd J. Mullin Research Fellow at the D'Amore-McKim School of Business at Northeastern University (USA), Corruption in International Business
11h00-11h20: Coffee break
11h20-13h00: Parallel Sessions
S1 Social, political and cultural aspects of corruption [Room 1]
Chair: André VIEIRA DE CASTRO
(OBEGEF)
Is there a vicious cycle between corruption and democracy at the global level? [S1.1]
Ana Melissa FERREIRA (DEGEIT, Universidade de Aveiro), Sara BATISTA (DEGEIT, Universidade de Aveiro), Mara MADALENO (DEGEIT, Universidade de Aveiro; GOVCOPP – Research Unit in Governance, Competitiveness and Public Policies)
Discussant: Nuno Guita (ALIGN’IN; OBEGEF)
The Social and Organizational Aspects of Corruption and Anticorruption [S1.2]
David JANCSICS (School of Public Affairs, San Diego State University – Imperial Valley Campus San Diego, USA)
Discussant: António Maia (Conselho de Prevenção da Corrupção; OBEGEF)
Cultural corruption: Lessons from the Petrobras scandal case [S1.3]
Camila Lee PARK; Mauro Fracarolli NUNES (ESCP Europe, Paris, France)
Discussant: Mariana Costa (Universidade do Porto; CIJE; OBEGEF)
Do you think that corruption can, sometimes, benefit the population? Some insights into Portuguese laypeople’s opinions [S1.4]
Gabrielle POESCHL; Kelly NOGUEIRA-RODRIGUES (Faculty of Psychology and Educational Sciences, Univ. of Porto, Portugal)
Discussant: André Vieira de Castro (OBEGEF)
14
S2 Fraud and corruption [Room 2]
Chair: Alda CORREIA
(OBEGEF)
An overview of relation between corporate governance and tax planning [S2.1]
Cristina SÁ; Helena ALVES (School of Technology and Management of Leiria (ESTG), Polytechnic Institute of Leiria, Portugal)
Discussant: António Dias (Universidade de Trás-os-Montes e Alto Douro; CETRAD; OBEGEF)
Index of perception of fraud in Portugal [S2.2]
Manuel NOGUEIRA; Óscar AFONSO; José António MOREIRA; Jorge ALVES; Orlando MASCARENHAS; Paulo VASCONCELOS; Raquel RIBEIRO (OBEGEF - Observatório de Economia e Gestão de Fraude, Portugal)
Discussant: Tiago Sequeira (CEFAGE-UBI, Universidade da Beira Interior; OBEGEF)
The Typology of Agency Models of Corruption and the Totalitarian Corruption Case [S2.3]
Andrei IVANOV (Public Administration Department, Graduate School of Management at St. Petersburg University, Russia)
Discussant: Nuno Guita (ALIGN’IN; OBEGEF)
Secrecy and Tax-Flight: The Accretion of Global Shadows [S2.4]
Michelle GALLANT (University of Manitoba, Canada)
Discussant: Alda Correia (OBEGEF)
13h00-14h30: Lunch
14h30-16h10: Parallel Sessions
S3 Detection of fraud and corruption [Room 1]
Chair: António MAIA
(Conselho de Prevenção da Corrupção; OBEGEF)
The watchdogs are not barking! Deconstructing organisational corruption in international development projects. - A Case study of firms sanctioned by the African Development Bank [S3.1]
Sanjeev NARRAINEN (Institute of Criminal Justice Studies – University of Portsmouth, Portsmouth, UK)
Discussant: José António Moreira (Faculdade de Economia, Universidade do Porto; OBEGEF)
Limitation of compliance frameworks in financial crime detection: from Know your client (KYC) to Know your Network (KYN) [S3.2]
Rostislav HALIPLII (CES, Paris I Sorbonne University, Paris, France); Marius-Cristian FRUNZA (LABEX ReFi, ESCP, Paris, France; Ural University, URFU, Ekateringurg, Russian Federation)
Discussant: António Dias (Universidade de Trás-os-Montes e Alto Douro; CETRAD; OBEGEF)
Understanding Recurring Corruption: A Descriptive Profile of Recidivists [S3.3]
Leyla ORUDZHEVA, Manjula SALIMATH (Department of Management, University of North Texas, Denton TX, USA)
Discussant: António Maia (Conselho de Prevenção da Corrupção; OBEGEF)
15
S4 Corruption in Higher Education [Room 2]
Chair: Gabrielle POESCHL
(Faculdade de Psicologia e de Ciências da Educação, Universidade do Porto)
A review of research on corruption and its philosophical assumptions in top international business and management journals [S4.1]
Päivi KARHUNEN (Center for Markets in Transition, Aalto University School of Business, Helsinki, Finland)
Discussant: Bruno Reynaud de Sousa (Faculdade de Letras, Universidade do Porto; IJP)
Reflections on corruption and institutional changes in the higher education context: a research agenda [S4.2]
Luís MENDES (Univ. Beira Interior, CEFAGE-UBI), Pedro NEVES (Univ. Beira Interior, CEFAGE-UBI), Tiago SEQUEIRA (Univ. Beira Interior, CEFAGE-UBI), Mário FRANCO (Univ. Beira Interior, CEFAGE-UBI), Óscar AFONSO (Univ. do Porto, CEFAGE-UBI, OBEGEF)
Discussant: Mariana Costa (Universidade do Porto; CIJE; OBEGEF)
Ethical perceptions of corporate behaviour by Business and Economics students: exploratory study on the relation with perceptions of academic misconduct [S4.3]
Carla SÁ (Escola de Economia e Gestão, Universidade do Minho), Nuno SOARES (Departamento de Engenharia e
Gestão Industrial and Cef.UP, Universidade do Porto), Sílvia SOUSA (Escola de Economia e Gestão, Universidade do
Minho), Marieta VALENTE (Escola de Economia e Gestão, Universidade do Minho, Portugal)
Discussant: Aurora Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC TEC; OBEGEF)
16h10-16h30: Coffee Break
16h30-18h10: Parallel Sessions
S5 Shadow Economy [Room 1]
Chair: Óscar AFONSO
(Faculdade de Economia, Universidade do Porto; CEFAGE-UBI; OBEGEF)
Assessment of the VAT gap due shadow economy within EU [S5.1]
Marius-Cristian FRUNZA (LABEX ReFi, ESCP, Paris, France; Ural University, URFU, Ekateringurg, Russian Federation)
Discussant: Pedro Neves (CEFAGE-UBI, Universidade da Beira Interior; OBEGEF)
The underground economy, unemployment and the accuracy of estimates: the case of Spain [S5.2]
Ignacio Mauleón TORRES (Department of Fundamentos del Análisis Económico, University Rey Juan Carlos, Madrid, Spain); Jordi SARDÀ (Department of Economics, University Rovira i Virgili, Tarragona, Spain)
Discussant: Paulo Vasconcelos (Faculdade de Economia, Universidade do Porto; OBEGEF)
Tip of the Iceberg: Estimating the Magnitude of Fraud and Corruption in the Shadow Economy [S5.3]
Petter GOTTSCHALK (BI Norwegian Business School, Norway)
Discussant: José António Moreira (Faculdade de Economia, Universidade do Porto; OBEGEF)
Shadow economy in the EU [S5.4]
Philippe ADAIR (ERUDITE research center, University Paris-Est Créteil, France)
Discussant: Óscar Afonso (Faculdade de Economia, Universidade do Porto; CEFAGE-UBI; OBEGEF)
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S6 Corruption and economic growth [Room 2]
Chair: Tiago SEQUEIRA
(CEFAGE-UBI, Universidade da Beira Interior; OBEGEF)
The Impact of Corruption on Economic Growth of Emerging Economies [S6.1]
Ana Patrícia PINHO, Pedro Cosme VIEIRA (Faculdade de Economia, Universidade do Porto, Portugal)
Discussant: Bruno Reynaud de Sousa (Faculdade de Letras, Universidade do Porto; IJP)
Social and Economic Determinants of Corruption: A Panel Data Analysis for 25 European and OECD Members [S6.2]
Fatih SÖNMEZ; José R. PIRES MANSO (Department of Gestão e Economia, Universidade da Beira Interior, Covilha, Portugal)
Discussant: Aurora Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC TEC; OBEGEF)
Globalization, Economic Development, and Corruption: A Cross-Lagged Contingency Perspective [S6.3]
Rachida AÏSSAOUI (Department of Management, College of Business, Ohio University, USA)
Discussant: Pedro Neves (CEFAGE-UBI, Universidade da Beira Interior; OBEGEF)
Corruption and Economic Growth Revisited [S6.4]
Maksym IVANYNA (Joint Vienna Institute, Austria); Alex MOURMOURAS (International Monetary Fund - IMF); Peter RANGAZAS (Indiana University, USA)
Discussant: Tiago Sequeira (CEFAGE-UBI, Universidade da Beira Interior; OBEGEF)
18h10: Closing session
Closing session [Room 1]
Best Paper Awards Announcement: Carlos PIMENTA, Chair of the I2FC2017 Scientific Commission
Closing address: Óscar AFONSO (President of OBEGEF - Observatório de Economia e Gestão de Fraude/Observatory of the Economics and Management of Fraud)
18h30: Farewell cocktail party Atmosfera m’s Hall
17
List of the Abstracts of the Session Papers Presented at the Conference
(By order of the Sessions)
18
Opening Plenary Session
Corruption in International Business
Alvaro CUERVO-CAZURRA (Northeastern University)
I analyze corruption in international business, presenting a critical assessment of the topic
and providing suggestions for future research. I argue that corruption creates a laboratory
for expanding international business studies because its illegal nature, the differences in
perception about illegality, and the variation in the enforcement of laws against bribery
across countries challenge some of the assumptions upon which arguments have been
built, i.e., that managers can choose appropriate actions without major legal implications.
Hence, I first provide suggestion for how to analyze the topic of corruption in future studies
by analyzing the types, measures, causes, consequences, and controls of corruption. I then
provide suggestions for how to extend leading theories of the firm by using corruption as a
laboratory that challenges some of the assumptions of these theories: extending agency
theory by analyzing the existence of unethical agency relationships; extending transaction
cost economics by analyzing illegal transaction costs minimization; extending the resource-
based view by studying corporate social irresponsibility capability; extending resource
dependency by analyzing the ethical power escape; and extending neo-institutional theory
by studying illegal legitimacy.
[in Cuervo-Cazurra, A. (2016). Corruption in international business. Journal of World Business 51: 35–49]
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S1. Social, political and cultural aspects of corruption
Is there a vicious cycle between corruption and democracy at the global level? [S1.1]
Ana Melissa FERREIRA (DEGEIT, Universidade de Aveiro)
Sara BATISTA (DEGEIT, Universidade de Aveiro)
Mara MADALENO (DEGEIT, Universidade de Aveiro; GOVCOPP – Research Unit in Governance,
Competitiveness and Public Policies)
Which is the effective relationship between democracy and corruption? Most of models and studies
already done say that the relationship between these two variables is inverse and, more recently,
it has been assumed, through many theoretical developments and case studies, that it is possible
to exist an inverted U-shaped relationship. But, it remains to be answered if there exists a global
vicious cycle between corruption and democracy. By building panel data with information collected
from 65 democratic countries, in a time period from 2002 to 2014, we analyse this potential vicious
cycle between these two variables. Results seem to evidence that higher democracy levels will
reduce corruption and that countries with more freedom show less corruption levels. More
government effectiveness and rule of law will decrease corruption levels. We prove the existence
of a vicious cycle between corruption and democracy which should be taken into account by both
policy makers and citizens, and should encourage voters in exercising their rights so as to lead to
lower corruption levels and higher democratic countries.
The Social and Organizational Aspects of Corruption and Anticorruption [S1.2]
David JANCSICS (School of Public Affairs, San Diego State University – Imperial Valley Campus San Diego,
USA)
More and more scholars, practitioners and managers realize the disappointing outcomes of
anticorruption policies implemented over the last fifteen-twenty years. Clearly, mainstream
anticorruption strategies conceptualize corruption on a too narrow basis by using the oversimplistic
micro-level principal-agent model of economics. Such measures do not view corruption as a
phenomenon deeply embedded in organizational and social structures. Although several disciplines
have revealed important features and multiple forms of corruption their findings have never been
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integrated and we have not learned enough to effectively fight corruption in the various forms in
which it is manifest. Synthesizing recent developments and ideas from multiple disciplines this
study introduces a new typology-based conceptualization of corruption. Based on these integrated
streams of research we also discuss the possible impacts of anticorruption frames on different types
of corruption.
Cultural corruption: Lessons from the Petrobras scandal case [S1.3]
Camila Lee PARK (ESCP Europe, Paris, France)
Mauro Fracarolli NUNES (ESCP Europe, Paris, France)
The confounding aspects of corrupt behavior and cultural idiosyncrasies have long been portraited
in fiction and on anecdotal evidences of unethical business transactions. Indigenous practices in
emerging countries have been particularly targeted for the ambiguity around their ethicality. This
article aims to understand the impact of national cultures’ characteristics on corruption cases, and
more specifically the role of indigenous practices on such matters. The analysis of two regression
models of Hofstede’s national cultures dimensions on the Corruption Perception Index are
presented, followed by a single-case study of the biggest corruption scandal ever seen, involving
Brazilian company Petrobras. National and international media perceptions around the link
between the case and the country’s indigenous practice, i.e. the Brazilian jeitinho, are rhetorically
assessed through the attributional coding technique. The unfolding of the case is expected to
generate insights as to the significance of indigenous practices to ethical management.
Do you think that corruption can, sometimes, benefit the population? Some insights into
Portuguese laypeople’s [S1.4]
Gabrielle POESCHL (Faculty of Psychology and Educational Sciences, Univ. of Porto, Portugal)
Kelly NOGUEIRA-RODRIGUES (Faculty of Psychology and Educational Sciences, Univ. of Porto, Portugal)
It is well-known that authors from different domains have different views on corruption, its
consequences and the way to deal with the phenomenon. There is also evidence that some of the
divergences stem from the difficulty to determine which actions are considered corrupt in societal
contexts with different normative practices, and/or from different conceptions of morality. In a
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study conducted by means of an on-line survey, we attempted to understand whether laypeople
share the dominant views on corruption or whether they share alternative conceptions. For this
purpose, we asked 215 Portuguese adults to give us their opinions about the extent of corruption
in Portugal and about the consequences of corruption, to report their feelings toward cases of
corruption and their perceptions about the effort made in Portugal to fight corruption. Results
reveal differences in laypeople’s opinions. An interesting finding is that the respondents who agree
that, in some instances, corruption can benefit the population are also those who perceive a higher
level of morality in the Portuguese population. The discussion bears on whether the conceptions
and measures adopted by international anti-corruption organizations are congruent with
laypeople’s motivation to build a fair society.
S2. Fraud and corruption
An overview of relation between corporate governance and tax planning [S2.1]
Cristina SÁ (School of Technology and Management of Leiria (ESTG), Polytechnic Institute of Leiria, Portugal)
Helena ALVES (School of Technology and Management of Leiria (ESTG), Polytechnic Institute of Leiria,
Portugal)
The main purpose of this paper is to discuss the role corporate governance characteristics has in
tax planning decisions by revisiting the main empirical literature in the last years. Firstly, we discuss
concept of corporate governance and its attributes. After, we analyse the concept of tax planning.
Finally, we present some of the main conclusions of recent empirical studies. As the separation of
management and ownership was identified as the basic corporate governance conflict, tax rules
should be a way that assure that management behavior is not in conflict with the other
stakeholders. Recent literature suggests that the link between corporate governance and tax
planning can generate new insights into the real relation of tax planning and the attributes of
corporate governance. In some studies taxes have been treated only as market imperfections that
influence capital structure and dividend policies, while other authors have incorporated the
possibility of agency problems in their analyses. In our analysis we conclude that corporations with
smaller boards of decision-makers seem to be more risky averse and so less willing to carry out tax
planning strategies. Also we highlight that tax planning activities can induce to a reduction on the
market value of firms.
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Index of perception of fraud in Portugal [S2.2]
Manuel NOGUEIRA (OBEGEF)
Óscar AFONSO (OBEGEF)
José António MOREIRA (OBEGEF)
Jorge ALVES (OBEGEF)
Orlando MASCARENHAS (OBEGEF)
Paulo VASCONCELOS (OBEGEF)
Raquel RIBEIRO (OBEGEF)
Fraud is a major problem nowadays. For defining measures to fight fraud, it is essential the
existence of adequate information guiding public policies. The present work aims to make a
contribution in that sense by analyzing the perception of fraud in Portugal. To attain this objective,
a survey was carried out with a representative sample of the Mainland Portuguese population.
Results reveal that the Portuguese perceive fraud as having a large magnitude in the country and
that it has increased in 2016 compared to 2015.
The Typology of Agency Models of Corruption and the Totalitarian Corruption Case [S2.3]
Andrei IVANOV (Public Administration Department, Graduate School of Management at St. Petersburg
University, Russia)
The paper introduces a new typology of agency models of corruption, based on the conformity of
principal and agent’s preferences to the ideal social preferences. The proposed approach has
allowed to theoretically substantiate the existence of new models of corruption behavior, quasi-
and totalitarian corruption, and subsequently to reveal cases of such behavior in the public
procurement practice. In conditions of inefficient regulation, bona fide agents, in an effort to best
meet the needs of society, may violate certain provisions of regulatory legal acts or regulatory policy
principles (quasi-corruption) or act in accordance with the inefficient regulation, being deprived of
the possibility to violate it (totalitarian corruption). After the theoretical background of totalitarian
corruption had been discovered, the case of it was found in the Russian regulation of single-source
procurement that directly restricts total annual of public organization small purchasing. The paper
23
discusses the results of survey of St. Petersburg public hospitals procurement which has given
evidence that some of them in the case of small purchasing prefer electronic reverse auction to
single-source procurement due to legislation but the majority do the same thing due to monitor’s
practice that controls single-source procurement to a much greater extent than electronic reverse
auctions.
Secrecy and Tax-Flight: The Accretion of Global Shadows [S2.4]
Michelle GALLANT (University of Manitoba, Canada)
Global tax-flight permeates the modern world. Trillions in taxable earnings allegedly escape the
reach of the domestic tax norms, depriving states of much needed revenues. Political discourse is
rife with accusations that tax-havens and the ‘off-shore’ finance industry service the depletion of
the public purse. Popular media vilifies multi-national conglomerates for their systemic
exploitation of opportunities to keep profits in private hands rather than pay their fair share of
taxes. The notorious Panama papers scandal speaks of a vast world of hidden finance. Whistle-
blowers disclose the complicity of well-established banking patriarchs in the subversion of domestic
tax laws.
Modern tax-flight is heavily attributable to secrecy. Tax liability cannot descend upon that which it
cannot see. Secrecy nurtures revenue depletion by creating a dark universe into which resources
disappear and evade the exigencies of domestic tax norms. This paper offers an account of that
nurturing.
S3. Detection of fraud and corruption
The watchdogs are not barking! Deconstructing organisational corruption in international
development projects. - A Case study of firms sanctioned by the African Development
Bank [S3.1]
Sanjeev NARRAINEN (Institute of Criminal Justice Studies – University of Portsmouth, Portsmouth, UK)
With the rapid pace of globalisation, firms are thriving in international market forces in order to be
more efficient and to operate at a lower cost. Arguably, engaging in global value chains involves
24
cost and risks for multinational corporations (MNCs) firms. This paper captures the complexity of
organisation corruption in developmental projects and tries to shed more light on the criminogenic
nature of these firms. It contributes to a better understanding of how and why corruption takes
place in a formal organisational context.
Corruption has undoubtedly a negative effect on development and causes divergence of fund from
the intended purposes. This research uses a case study approach to demystify the supply-side of
corruption in developmental projects. Four firms sanctioned by the African Development Bank and
which have participated in negotiated settlements with the bank are studied. Against this
background, the present paper contributions to the empirical literature on the globalisation-
corruption nexus of MNCs. This paper focuses on the nexus between private and public sector and
identify the supply-side of corruption as an important facilitator of corruption. It further argues that
MNCs have a propensity to anesthetize institutions in playing their watch-dogs roles. Consequently,
when the watch dogs do not bark, systemic corruption sets in.
Limitation of compliance frameworks in financial crime detection: from Know your client
(KYC) to Know your Network (KYN) [S3.2]
Rostislav HALIPLII (CES, Paris I Sorbonne University, Paris, France)
Marius-Cristian FRUNZA (LABEX ReFi, ESCP, Paris, France; Ural University, URFU, Ekateringurg, Russian
Federation)
The aim of this paper is to assess the limitation the classic compliance framework of Know Your
Client. We introduce a change of paradigm by replacing the static and one-dimension concept of
Know Your Client (KYC) with a dynamic, multi-dimensional and forward-looking concept of “Know
Your Network" (KYN). KYN requires connections and linkages between the nodes of the network
are established through data linkeage on various databases including national registries of people
and companies. Thus the KYN technique provides with at fully fledged picture of an individual, or
a company with their corresponding transnational networks. The paper shows the benefits of this
concept for assessing hidden connections within criminal networks and explore the future dynamic
of the network. KYN allows to quantify the risks of a set of clients in respect to various drivers
including AML, CTF, Sanctions and Tax issues.
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Understanding Recurring Corruption: A Descriptive Profile of Recidivists [S3.3]
Leyla ORUDZHEVA (Department of Management, University of North Texas, Denton TX, USA)
Manjula SALIMATH (Department of Management, University of North Texas, Denton TX, USA)
The reversion into corruption by companies previously convicted and sanctioned (i.e. recidivists)
presents implications for future control/prevention. While repeat offenders are explored in
criminology, this problem remains unexamined in corporate corruption. Thus, the paper aims to
develop a descriptive profile of recidivist firms, committing acts of bribery for the second time. The
sample and data were derived from Foreign Corrupt Practice Act Clearinghouse (FCPAC) and the
Bloomberg terminal by examining 202 related enforcement actions against companies violating the
Foreign Corrupt Practice Act. The identified recidivists were companies with more than one group
of related enforcement action for a series of related foreign bribery actions as identified by the
FCPAC. A descriptive profile of the recidivists was inductively developed, based on secondary data
on a range of financial and governance indicators. The time period covered 1984-2017 and included
the year of occurrence of bribery sanctioned by the 1st enforcement action through the year of the
2nd enforcement action. The data were further categorized into broader theoretical constructs
based on extant literature: financial and market performance, innovation, board of director’s
composition and process, policy control, corporate social responsibility, and reporting. A within and
cross-case comparison helped identify common patterns with practical implications.
S4. Corruption in Higher Education
A review of research on corruption and its philosophical assumptions in top international
business and management journals [S4.1]
Päivi KARHUNEN (Center for Markets in Transition, Aalto University School of Business, Helsinki, Finland)
This work-in-progress paper reviews 99 articles on corruption in top international business and
management journals, defined as those included in the FT50 list. The first aim of the paper is to
provide an overview of the ways in which corruption is addressed, including the level of analysis,
and theories, methods and measures applied. The second aim it to analyze the philosophical
assumptions that underlie the definitions of and approaches to corruption in the articles. This is
26
done by applying Waldman’s (1974) categorization of views of corruption in international business
along to antagonist-revisionist and moralist-pragmatic dimensions. The review identified four
categories of approaching corruption: (1) Corruption as an organizational phenomenon, (2) firm
responses to corruption as a feature of the business environment, (3) antecedents and implications
of corruption on the macro-level and (4) the concept of corruption and its measurement. The
findings show that all four views identified by Waldman are still visible and that each category has
its own dominant view of corruption. Furthermore, the antagonist-revisionist debate has extended
to the micro-level of analysis, and the purely pragmatic view has been replaced with a relativist
view that conceptualizes corruption as culturally constructed.
Reflections on corruption and institutional changes in the higher education context: a
research agenda [S4.2]
Luís MENDES (Univ. Beira Interior, CEFAGE-UBI)
Pedro NEVES (Univ. Beira Interior, CEFAGE-UBI)
Tiago SEQUEIRA (Univ. Beira Interior, CEFAGE-UBI)
Mário FRANCO (Univ. Beira Interior, CEFAGE-UBI)
Óscar AFONSO (Univ. do Porto, CEFAGE-UBI, OBEGEF)
Corruption and misconduct affect every country, and represent a source of concern for
governments, organizations as well as individuals. Considering such a context, and the challenges
faced by higher education institutions concerning the relevance and excellence of the services
offered, the main aim of this paper is to report a set of reflections and questions concerning the
influence of academic corruption or misconduct issues on HEI’ performance, as well as their
potential social and economic impacts. Moreover, authors outline some research streams to be
developed in the future, considered as significant opportunities to expand the knowledge regarding
the main antecedents and outcomes of corruption and misconduct behaviours in HEI.
27
Ethical perceptions of corporate behaviour by Business and Economics students:
exploratory study on the relation with perceptions of academic misconduct [S4.3]
Carla SÁ (Escola de Economia e Gestão, Universidade do Minho)
Nuno SOARES (Departamento de Engenharia e Gestão Industrial and Cef.UP, Universidade do Porto)
Sílvia SOUSA (Escola de Economia e Gestão, Universidade do Minho)
Marieta VALENTE (Escola de Economia e Gestão, Universidade do Minho, Portugal)
The way that today’s Higher Education students perceive corporate behaviours in terms of ethics is
likely to affect their future behaviours in the corporate world. Understanding how they appraise
ethical behaviours today may contribute to anticipating how they are likely to behave in the future.
In this exploratory study, we survey Economics and Business undergraduate students on their
assessment of academic misconduct by students and ethical behaviour by firms. We argue that
ethical perceptions of their present reality are related to how they perceive the world outside
academia, in particular the corporate world. We further explore how gender and the educational
background of the students’ families moderate this relation. We find evidence that women,
individuals from more (formally) educated families and individuals stricter about the seriousness of
academic fraud tend to hold more ethical views of firm behaviour. This suggests that actions by
Higher Education institutions can have a direct impact on beliefs and behaviours about academic
fraud and potentially shape future corporate actors and leaders’ views of firms’ ethical behaviours.
S5. Shadow Economy
Assessment of the VAT gap due shadow economy within EU [S5.1]
Marius-Cristian FRUNZA (LABEX ReFi, ESCP, Paris, France; Ural University, URFU, Ekateringurg, Russian
Federation)
The aim of this paper is to provide with an accurate estimate of the VAT gap due to shadow
economy within the European Union. Shadow economy circumvents the formal taxation system
including the VAT. The estimation is based on an econometric model that uses as macro-economic
data as drivers for the size of the VAT gap. The model uses as input data the estimates of the siwze
of the shadow economy as measure by Schnider (2016). The results show that the shadow
28
economy generates around 50 billion euros of gap, accounting for 30 % of the totat European Union
VAT gap. Countries from Southern and Eastern Europe have the biggest contributions to the VAT
gap.
The underground economy, unemployment and the accuracy of estimates: the case of
Spain [S5.2]
Ignacio Mauleón TORRES (Department of Fundamentos del Análisis Económico, University Rey Juan Carlos,
Madrid, Spain)
Jordi SARDÀ (Department of Economics, University Rovira i Virgili, Tarragona, Spain)
In this article an estimate is made of the size of the underground economy in Spain. For this
purpose, a monetary approach is used and important methodological contributions are introduced.
In particular, the methodology for the calculation of the underground economy is clarified in a novel
way and the appropriate monetary aggregate for this estimate is discussed. Variables related to the
labour market are introduced as explanatory variables and a calculation is made of the variances of
the underground economy and its derived values - hidden employment and loss of tax revenue.
This is a key point in any econometric estimate that is, surprisingly, often omitted in estimates of
the underground economy.
Tip of the Iceberg: Estimating the Magnitude of Fraud and Corruption in the Shadow
Economy [S5.3]
Petter GOTTSCHALK (BI Norwegian Business School, Norway)
This paper is presenting what experts that have uncovered some forms of white-collar crime as well
as students think and believe about the magnitude, causes of, and reactions to this phenomenon.
We introduce a comparison with social security fraud, while alternatives for comparison might as
well be securities fraud or other kinds of financial crime such as trade fraud, discloser fraud,
accounting fraud, investment fraud, real estate fraud, and so on. This paper describes research
where we attempt to estimate the iceberg size. This research is important, as white-collar crime
competes with other kinds of financial crime for police resources. For example, white-collar crime
may compete with social security fraud for financial crime investigations.
29
Shadow economy in the EU [S5.4]
P Philippe ADAIR (ERUDITE research center, University Paris-Est Créteil, France)
The Non-Observed Economy (NOE) vs. the shadow economy remains a controversial issue. Illegal,
underground and informal activities encapsulated within the NOE/shadow economy display large
discrepancies throughout the European Union. First, a tractable taxonomy of the aforementioned
market activities is designed according to both definition and scope, whereupon a wide spectrum
of estimation methods applies. Second, direct measurements provided by tax audits, household
informal expenditure and labour market surveys provide piecemeal information regarding such
unobserved activities; a cross-section survey issued from a unique questionnaire applied to all
European countries in 2007 and again in 2013 deserves special attention. Third, indirect
macroeconomic measurements are drawn from discrepancies on the market for goods and services
on the money market and on the labour market, whereas the DYMIMIC (dynamic multiple
indicators-multiple causes) method carves the trends of the shadow economy (hereafter SE).
Fourth, the estimates of the EU shadow economy drawn from the DYMIMIC model are compared
with the assessment of the NOE according to national accounts adjustments; the relevance of major
determinants of the NOE/shadow economy -tax burden as well as the characteristics of the informal
workforce, is discussed.
S6. Corruption and economic growth
The Impact of Corruption on Economic Growth of Emerging Economies [S6.1]
Ana Patrícia PINHO (Faculdade de Economia, Universidade do Porto, Portugal)
Pedro Cosme VIEIRA (Faculdade de Economia, Universidade do Porto, Portugal)
The theme of corruption is widely treated by numerous scholars because evidence shows that,
under normal circumstances, corruption is counter-productive for countries’ economic
performance. Corruption influences negatively the economy either directly by changing the
allocation of public resources and, indirectly, by changing incentives, prices, and opportunities
available to economic agents. In spite of being difficult to define precisely what corruption is, there
is a general agreement that it is related with the abuse of authority by public servants in law
enforcement for private benefit. To measure the extent of corruption, we can do it objectively by
analysing activities that are more propitious to involve corruption, or subjectively, by using
30
perception based-measures of corruption. Although it should be better to use objective measures
on corruption, due to high costs and difficulties in using the same methodology across countries, it
is more productive to use the Corruption Perception Index that exists for a large set of countries
and years. The present paper aims to analyse the impact of corruption on economic growth of
emerging economies that include 39 economies that represent 59% of the global population and
38% of global GDP PPP. Using an econometric model estimated using W-OLS with GDP PC PPP
annual growth rate as dependent variable, we conclude that corruption decreases significantly
economic growth (a country with CPI equal to the mean plus one standard deviation growth rate is
3,2 pp higher than a similar country with CPI equal to the mean minus one standard deviation) and
that emergent economies are, in this aspect, not different to all other economies.
Social and Economic Determinants of Corruption: A Panel Data Analysis for 25 European
and OECD Members [S6.2]
Fatih SÖNMEZ (Department of Gestão e Economia, Universidade da Beira Interior, Covilha, Portugal)
José R. PIRES MANSO (Department of Gestão e Economia, Universidade da Beira Interior, Covilha, Portugal)
The aims of this study are to investigate the determinants of corruption, to test it empirically using
a model that relates the economic and social determinants of corruption such as income inequality,
GDP per capita, HDI-human development index, Government final consumption expenditure and
Tax on goods and services with the perception of corruption in 25 European countries which are
also members of the OECD. The time span for data collection is 1995-2015. In our empirical
research, we use a panel data approach (fixed effect model) that we estimate with the Eviews
software. The empirical findings include that GDP per capita, Human Development Index and Taxes
on goods and services, ceteris paribus, have negative effects on corruption and that Income
inequality and General Government Final Consumption Expenditure have positive effects on it
(corruption). This paper is innovative since, as far as we know, nobody studied such a sample of
these 25 countries from Europe and OECD with such a methodology; thus, it fills a gap in the existing
literature and increases the body of knowledge.
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Globalization, Economic Development, and Corruption: A Cross-Lagged Contingency
Perspective [S6.3]
Rachida AÏSSAOUI (Department of Management, College of Business, Ohio University, USA)
Prior research on globalization has revealed that the relationship between globalization and
economic development is complicated, especially when considering the role of corruption in this
framework. This article investigates globalization dynamics with the view to offer a more refined
approach of globalization (i.e., accounting for its economic, social, and political dimensions) while
considering a country’s level of economic development, a key boundary condition in such dynamics.
Drawing on a longitudinal sample of 173 countries and using novel, cross-lag analytical methods,
we show that the relationship between globalization, economic development, and corruption are
more nuanced than has been previously captured in the literature. Specifically, the findings show
that the gains from different dimensions of globalization tend to manifest in low and middle income
countries, and that for high income countries, globalization, notably political, impact economic
development in an unexpected direction. Moreover, the empirical strategy in this study allows for
causal interpretations between these variables of interest, and highlights boundary conditions
where corruption is less relevant in explaining the relationship between globalization and
development.
Corruption and Economic Growth Revisited [S6.4]
Maksym IVANYNA (Joint Vienna Institute, Austria)
Alex MOURMOURAS (International Monetary Fund - IMF)
Peter RANGAZAS (Indiana University, USA)
While literature finds many channels through which corruption can hurt economic growth, the link
proved hard to establish in empirical cross-country studies. In this paper I show that part of the
explanation of this puzzle is that there is a reverse causality: everything else equal, exogenously-
driven economic growth can increase corruption. The reason is that the boost to output increases
tax revenue, and hence pool of resources that corrupt public officials can embezzle. I show the
workings of this channel in a simple stylized model, which is then accompanied by numerical
simulations in a dynamic general equilibrium overlapping-generations model, which allows for
corruption and tax evasion. I also present empirical evidence, which supports my findings.
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