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The effect of corporate lobbying on fraud and money laundering

Author

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  • Mahdi Salehi
  • Fatemeh Norouzi

Abstract

Purpose - This study aims to assess the effect of corporate lobbying power on fraud and money laundering in listed firms on the Tehran Stock Exchange. For the study, the information of 173 firms is assessed during 2013–2020, and a total number of 1,384 year-companies are analysed. Design/methodology/approach - In this paper, the Beneish model is used for fraud detection, and the clause of the auditor’s report on money laundering is used for the variable of money laundering. The multivariate regression, Logistic regression, the fixed effects of panel data, additional random effects tests, Hausman, least generalised squares and T + 1 are used by using the Stata Software. Findings - The obtained results indicate a direct and significant relationship between lobbying and fraud and lobbying and money laundering. Suppose the board members of firms are among the parliament members or the government cabinet (politicians) and/or major shareholders affiliated with state-owned and/or quasi-governmental institutions. In that case, the likelihood of corporate lobbying will be increased. Originality/value - The outcomes of the current study give great insight to developing countries due to the high volume of money laundering to reduce such a financial crime.

Suggested Citation

  • Mahdi Salehi & Fatemeh Norouzi, 2022. "The effect of corporate lobbying on fraud and money laundering," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 26(3), pages 553-583, March.
    • Handle: RePEc:eme:jmlcpp:jmlc-01-2022-0017
    DOI: 10.1108/JMLC-01-2022-0017
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