title: Do organizational and political-legal arrangements explain financial wrongdoing?
abstract: The 2008 financial crisis was a systemic problem with deep-rooted structural causes that created opportunities to engage in financial malfeasance, a form of corporate wrongdoing. However, few quantitative studies exist on the effects of organizational and political-legal arrangements on financial malfeasance. In this paper, we examine the effects of organizational and political-legal arrangements that emerged in the 1990s in the FIRE sector (i.e., financial, insurance, and real estate) on financial malfeasance. Our historical contextualization demonstrates how changes in the political-legal arrangements facilitate the emergence of new corporate structures and opportunities for financial malfeasance. Our longitudinal quantitative analysis demonstrates that US FIRE sector corporations with a more complex organizational structure, larger size, lower dividend payment, and higher executive compensation are more prone to commit financial malfeasance.
authors.affiliation: Department of Sociology, Texas A&M University.
authors.forename: Harland
authors.initials: H
authors.lastname: Prechel
authors.affiliation: Department of Sociology, Tsinghua University.
authors.forename: Lu
authors.initials: L
authors.lastname: Zheng
mesh_terms: D003415:Crime / Q000523:psychology*; D005376:Financial Management; D006801:Humans; D007603:Jurisprudence; D016015:Logistic Models; D009042:Motivation; D009938:Organizations / Q000191:economics* / Q000331:legislation & jurisprudence / Q000458:organization & administration; D011057:Politics; D012456:Salaries and Fringe Benefits / Q000191:economics*; D012923:Social Class; D012932:Social Facilitation; D066252:Sociological Factors; D014481:United States
keywords: Corporate wrongdoing; FIRE sector; financial malfeasance; organizational; political-legal