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Foreign corporations and the culture of transparency: Evidence from Russian administrative data

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  • Braguinsky, Serguey
  • Mityakov, Sergey

Abstract

Firms from developed countries carry a culture of transparency in business transactions that is opposite to the culture of hiding and insider dealing in developing and transition economies. We employ Russian administrative data on reported earnings and market values of cars to measure wage misreporting for individual employees of domestic firms in Moscow. We show that closer ties to multinationals lead to improved transparency of wage reporting in private Russian companies. Employees located closest to movers from multinationals in the job quality space experience the largest gains in transparency. We find a robust correlation between wage misreporting and accounting fraud.

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  • Braguinsky, Serguey & Mityakov, Sergey, 2015. "Foreign corporations and the culture of transparency: Evidence from Russian administrative data," Journal of Financial Economics, Elsevier, vol. 117(1), pages 139-164.
  • Handle: RePEc:eee:jfinec:v:117:y:2015:i:1:p:139-164
    DOI: 10.1016/j.jfineco.2013.02.016
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    Cited by:

    1. Serguey Braguinsky & Sergey Mityakov & Andrey Liscovich, 2014. "Direct Estimation of Hidden Earnings: Evidence from Russian Administrative Data," Journal of Law and Economics, University of Chicago Press, vol. 57(2), pages 281-319.
    2. repec:spr:jbecon:v:88:y:2018:i:3:d:10.1007_s11573-017-0886-0 is not listed on IDEAS
    3. Kalyvas, Antonios Nikolaos & Mamatzakis, Emmanuel, 2017. "Do creditor rights and information sharing affect the performance of foreign banks?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 50(C), pages 13-35.
    4. Andrzej Cieślik & Łukasz Goczek, 2015. "Percepcja korupcji na poziomie przedsiębiorstw w krajach postkomunistycznych," Gospodarka Narodowa, Warsaw School of Economics, issue 2, pages 55-77.
    5. Mironov, Maxim, 2015. "Should one hire a corrupt CEO in a corrupt country?," Journal of Financial Economics, Elsevier, vol. 117(1), pages 29-42.
    6. repec:eee:jfinec:v:126:y:2017:i:3:p:516-542 is not listed on IDEAS

    More about this item

    Keywords

    Culture; Transparency; Foreign corporations; Diffusion; Foreign direct investment;

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • P37 - Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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