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To launder or not to launder: are there positive effects for the economies of countries who launder money?

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  • June Buchanan
  • Yun Shen

Abstract

This paper empirically examines the impact of corporate money laundering/gambling activities on firms’ financial performance. We specifically address whether Australian firms associated with money laundering suffer any short‐ or long‐term financial performance effects following the public announcement of money laundering activities. Our findings suggest that Australian firms that engage in money laundering/gambling activities perform significantly better than firms in other countries after such announcements.

Suggested Citation

  • June Buchanan & Yun Shen, 2021. "To launder or not to launder: are there positive effects for the economies of countries who launder money?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2697-2716, June.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:2:p:2697-2716
    DOI: 10.1111/acfi.12680
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    References listed on IDEAS

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    1. Gatzert, Nadine, 2015. "The impact of corporate reputation and reputation damaging events on financial performance: Empirical evidence from the literature," European Management Journal, Elsevier, vol. 33(6), pages 485-499.
    2. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
    3. Diego Ravenda & Maika M. Valencia-Silva & Josep Maria Argiles-Bosch & Josep Garcia-Blandon, 2018. "Accrual management as an indication of money laundering through legally registered Mafia firms in Italy," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 31(1), pages 286-317, January.
    4. Bagella Michele & Busato Francesco & Argentiero Amedeo, 2009. "Money Laundering in a Microfounded Dynamic Model: Simulations for the U.S. and the EU-15 Economies," Review of Law & Economics, De Gruyter, vol. 5(2), pages 879-902, December.
    5. Maxim Mironov, 2013. "Taxes, Theft, and Firm Performance," Journal of Finance, American Finance Association, vol. 68(4), pages 1441-1472, August.
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