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Effects Of Governance On Corporate Ethics: A Cross-Country Investigation

Author

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  • Cristina Boța-Avram

    (Babeş-Bolyai University, Faculty of Economics and Business Administration)

Abstract

This research paper empirically investigates the extent to which the quality of governance measured through six dimensions developed by World Bank has a positive influence on the corporate ethics, or in other words, the ethical behaviour of firms in their interaction with public officials, politicians and other companies. By using a dual approach, from geographical and income group classification, this study analyses data from official reports issued by World Bank and World Economic Forum for a final sample of 140 countries, trying to highlight the positive relationship that might exist between governance clusters and ethical behaviour of firms. For the purpose of the paper, a multiple regression analysis was performed. The research results confirm that there are strong positive correlations between most of the governance indicators and companies’ ethical behaviour, even if there are some differences between various geographical areas, and also between different income categories economies, in terms of the intensity of this influence

Suggested Citation

  • Cristina Boța-Avram, 2013. "Effects Of Governance On Corporate Ethics: A Cross-Country Investigation," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 16(50), pages 3-26, December.
    • Handle: RePEc:rej:journl:v:16:y:2013:i:50:p:3-26
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    References listed on IDEAS

    as
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    5. Mark Schwartz, 2012. "The State of Business Ethics in Israel: A Light Unto the Nations?," Journal of Business Ethics, Springer, vol. 105(4), pages 429-446, February.
    6. Ennio Lugli & Ulpiana Kocollari & Chiara Nigrisoli, 2009. "The Codes of Ethics of S&P/MIB Italian Companies: An Investigation of Their Contents and the Main Factors that Influence Their Adoption," Journal of Business Ethics, Springer, vol. 84(1), pages 33-45, January.
    7. Kevin Morrell, 2006. "Governance, Ethics and the National Health Service," Public Money & Management, Taylor & Francis Journals, vol. 26(1), pages 55-62, January.
    8. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
    9. Adrian Groşanu & Paula Ramona Răchişan & Sorin Romulus Berinde, 2012. "Creative Accounting, An Expression Of The Disconnection Between Accounting And Taxation," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-5.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    ethical behaviour; governance indicators; control of corruption; rule of law; cross-country survey;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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