Cultural Determinants of Money Laundering Attractiveness: A Global Analysis

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.