IDEAS home Printed from https://ideas.repec.org/p/zbw/esprep/341069.html

Cultural Determinants of Money Laundering Attractiveness: A Global Analysis

Author

Listed:
  • Khan, Wahaj Ahmed
  • Siddiqui, Danish Ahmed

Abstract

This study examines the impact of national culture on countries' attractiveness for money laundering using Hofstede's dimensions as independent variables through panel regression analysis. The data has been collected from multiple countries, the study reveals culture as an inherent factor determining a country's level of exposure to financial crime that operates separately from economic and institutional phenomena. While the relationship between Power Distance and money laundering attractiveness is negative, suggesting that countries with a high openness to centralized authority and have hierarchical culture can avoid being a target through the implementation of tough oversight. Uncertainty Avoidance has a positive relationship, implying that a country with a low avoidance culture may facilitate laundering by providing easy ways to exploit rigid systems. Other dimensions, including Individualism, Indulgence, Masculinity, and Long-Term Orientation, demonstrate the expected direction of the relationship but fail to reach statistical significance. This evidence provides more support for the proposition that cultural factors can have an impact on the efficiency of AML. The paper finishes with policy recommendations promoting the development of AML as an aspect of a country's culture-specific approach and further research suggestions.

Suggested Citation

  • Khan, Wahaj Ahmed & Siddiqui, Danish Ahmed, 2026. "Cultural Determinants of Money Laundering Attractiveness: A Global Analysis," EconStor Preprints 341069, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:341069
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/341069/1/Cultural-Determinants-Money-Laundering.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    2. Benno Torgler & Neven T. Valev, 2010. "Gender And Public Attitudes Toward Corruption And Tax Evasion," Contemporary Economic Policy, Western Economic Association International, vol. 28(4), pages 554-568, October.
    3. Jar-Der Luo, 2011. "Guanxi Revisited: An Exploratory Study of Familiar Ties in a Chinese Workplace," Management and Organization Review, The International Association for Chinese Management Research, vol. 7(2), pages 329-351, July.
    4. Sjoerd Beugelsdijk & Tatiana Kostova & Kendall Roth, 2017. "An overview of Hofstede-inspired country-level culture research in international business since 2006," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(1), pages 30-47, January.
    5. Bryan W Husted, 1999. "Wealth, Culture, and Corruption," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(2), pages 339-359, June.
    6. Ahmed Yamen & Anas Al Qudah & Ahmed Badawi & Ahmed Bani-Mustafa, 2019. "The impact of national culture on financial crime," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 22(2), pages 373-387, May.
    7. Judge, William Q. & McNatt, D. Brian & Xu, Weichu, 2011. "The antecedents and effects of national corruption: A meta-analysis," Journal of World Business, Elsevier, vol. 46(1), pages 93-103, January.
    8. Ferwerda Joras, 2009. "The Economics of Crime and Money Laundering: Does Anti-Money Laundering Policy Reduce Crime?," Review of Law & Economics, De Gruyter, vol. 5(2), pages 903-929, December.
    9. J.C. Sharman, 2017. "Illicit Global Wealth Chains after the financial crisis: micro-states and an unusual suspect," Review of International Political Economy, Taylor & Francis Journals, vol. 24(1), pages 30-55, January.
    10. Chuck C Y Kwok & Solomon Tadesse, 2006. "National culture and financial systems," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(2), pages 227-247, March.
    11. Near, Janet P. & Miceli, Marcia P., 2016. "After the wrongdoing: What managers should know about whistleblowing," Business Horizons, Elsevier, vol. 59(1), pages 105-114.
    12. Richardson, Grant, 2008. "The relationship between culture and tax evasion across countries: Additional evidence and extensions," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 17(2), pages 67-78.
    13. Danur Condro Guritno & Mahrus Lutfi Adi Kurniawan & Irfan Mangkunegara & Bhimo Rizky Samudro, 2020. "Is there any relation between Hofstede’s cultural dimensions and corruption in developing countries?," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 28(1), pages 204-213, August.
    14. Laura L. Hansen, 2009. "Corporate financial crime: social diagnosis and treatment," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 16(1), pages 28-40, January.
    15. Victor Cui & Shujun Ding & Mingzhi Liu & Zhenyu Wu, 2018. "Revisiting the Effect of Family Involvement on Corporate Social Responsibility: A Behavioral Agency Perspective," Journal of Business Ethics, Springer, vol. 152(1), pages 291-309, September.
    16. Licht, Amir N. & Goldschmidt, Chanan & Schwartz, Shalom H., 2007. "Culture rules: The foundations of the rule of law and other norms of governance," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 659-688, December.
    17. Edwin M. Truman & Peter Reuter, 2004. "Chasing Dirty Money: The Fight Against Anti-Money Laundering," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 381, October.
    18. Ilan Alon & John R. McIntyre, 2008. "Business education in emerging economies," International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 2(1), pages 5-27.
    19. Luo, Jar-Der, 2011. "Guanxi Revisited: An Exploratory Study of Familiar Ties in a Chinese Workplace," Management and Organization Review, Cambridge University Press, vol. 7(2), pages 329-351, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pascal Gantenbein & Axel Kind & Christophe Volonté, 2019. "Individualism and Venture Capital: A Cross-Country Study," Management International Review, Springer, vol. 59(5), pages 741-777, October.
    2. Gaganis, Chrysovalantis & Leledakis, George N. & Pasiouras, Fotios & Pyrgiotakis, Emmanouil G., 2025. "National culture of secrecy and stock price synchronicity: Cross-country evidence," Journal of Banking & Finance, Elsevier, vol. 170(C).
    3. Fidrmuc, Jana P. & Jacob, Marcus, 2010. "Culture, agency costs, and dividends," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 321-339, September.
    4. Boubakri, Narjess & Mirzaei, Ali & Samet, Anis, 2017. "National culture and bank performance: Evidence from the recent financial crisis," Journal of Financial Stability, Elsevier, vol. 29(C), pages 36-56.
    5. Eugen Dimant & Guglielmo Tosato, 2018. "Causes And Effects Of Corruption: What Has Past Decade'S Empirical Research Taught Us? A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 335-356, April.
    6. Aggarwal, Raj & Goodell, John W., 2010. "Financial markets versus institutions in European countries: Influence of culture and other national characteristics," International Business Review, Elsevier, vol. 19(5), pages 502-520, October.
    7. Gaganis, Chrysovalantis & Hasan, Iftekhar & Pasiouras, Fotios, 2020. "National culture and housing credit," Journal of Empirical Finance, Elsevier, vol. 56(C), pages 19-41.
    8. Dong, Bin & Torgler, Benno, 2010. "The Causes of Corruption: Evidence from China," Institutions and Markets Papers 91024, Fondazione Eni Enrico Mattei (FEEM).
    9. Rotondi, Valentina & Stanca, Luca, 2015. "The effect of particularism on corruption: Theory and empirical evidence," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 219-235.
    10. repec:jaf:journl:v:8:y:2017:i:2:n:100 is not listed on IDEAS
    11. Rivera-Rozo, J.A. (Jairo) & García-Huitrón, M.E. (Manuel) & Steenbeek, O.W. (Onno) & van der Lecq, S.G. (Fieke), 2018. "National culture and the configuration of public pensions," Journal of Comparative Economics, Elsevier, vol. 46(2), pages 457-479.
    12. Knowles, Robin L & Pacheco Paredes, Angel Arturo, 2023. "International culture and audit deficiencies: Evidence from inspection reports of non-US companies listed in the US," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 51(C).
    13. Dong, Bin & Torgler, Benno, 2013. "Causes of corruption: Evidence from China," China Economic Review, Elsevier, vol. 26(C), pages 152-169.
    14. Zhe An & Zhian Chen & Donghui Li & Lu Xing, 2018. "Individualism and stock price crash risk," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(9), pages 1208-1236, December.
    15. Rabeb RIAHI, 2017. "Pratique de gestion des résultats et culture nationale. Quel lien ?," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 8(2), December.
    16. Klasing, Mariko J., 2013. "Cultural dimensions, collective values and their importance for institutions," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 447-467.
    17. Dang, Huong & Partington, Graham, 2020. "Sovereign ratings and national culture," Pacific-Basin Finance Journal, Elsevier, vol. 60(C).
    18. Hoang, Cong Huan & Ly, Kim Cuong & Xiao, Qin & Zhang, Xuan, 2023. "Does national culture impact trade credit provision of SMEs?," Economic Modelling, Elsevier, vol. 124(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:esprep:341069. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    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.