IDEAS home Printed from https://ideas.repec.org/a/cup/jfinqa/v58y2023i7p2783-2819_2.html
   My bibliography  Save this article

Negation of Sanctions: The Personal Effect of Political Contributions

Author

Listed:
  • Fulmer, Sarah
  • Knill, April
  • Yu, Xiaoyun

Abstract

We show that political contributions are associated with reduced civil and criminal sanctions for fraudulent executives. These managers benefit more from contributions if their firm also gained from the fraud, if they occupy top positions in firms with weak boards, or if they contribute to powerful politicians. Political contributions reduce budgetary resources for government enforcers and lengthen the Securities and Exchange Commission’s case time-to-resolution. They also facilitate penalty transfer from fraudulent managers to the firm, resulting in their entrenchment and long-term destruction of shareholder value. Our findings highlight an agency cost of political contributions and a mechanism undermining the disciplining effect of regulations.

Suggested Citation

  • Fulmer, Sarah & Knill, April & Yu, Xiaoyun, 2023. "Negation of Sanctions: The Personal Effect of Political Contributions," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 58(7), pages 2783-2819, November.
    • Handle: RePEc:cup:jfinqa:v:58:y:2023:i:7:p:2783-2819_2
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0022109022000977/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jfinqa:v:58:y:2023:i:7:p:2783-2819_2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/jfq .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.