Is Fraud Contagious? Coworker Influence on Misconduct by Financial Advisors

• 成果类型: Article
• 署名作者: Dimmock, Stephen G.; Gerken, William C.; Graham, Nathaniel P.
• 署名单位: Nanyang Technological University; University of Kentucky; Texas A&M University System; Texas A&M International University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12613
• 发表日期: 2018
• 页码: 1417-1450
• 关键词: social interactions; earnings management; random assignment; Board interlocks; retirement plan; decisions; networks; PARTICIPATION; inference; crime

摘要

Using a novel data set of U.S. financial advisors that includes individuals' employment histories and misconduct records, we show that coworkers influence an individual's propensity to commit financial misconduct. We identify coworkers' effect on misconduct using changes in coworkers caused by mergers of financial advisory firms. The tests include merger-firm fixed effects to exploit the variation in changes to coworkers across branches of the same firm. The probability of an advisor committing misconduct increases if his new coworkers, encountered in the merger, have a history of misconduct. This effect is stronger between demographically similar coworkers.