by Jonathan Karpoff, Scott Lee, and Gerald Martin

Managers caught bribing foreign officials enhance their shareholders’ wealth unless they simultaneously engage in accounting fraud.  Most firms apprehended for foreign bribery generally did not engage in fraud and after adjusting for regulatory penalties, their average ex ante net present value of their bribery-induced projects is positive.  In a new paper, we develop a model that uses a comprehensive set of bribery enforcement to shed light on the how common foreign bribery is among US-listed firms with foreign sales. Continue reading →