52ca6dc1___Carlson_School_of_Management__Presentation
[Date] 10/17/2014 [Presentation] 
Jonathan Karpoff, University of Washington " The Value of Foreign Bribery to Bribe Paying Firms The Value of Foreign Bribery to Bribe Paying Firms (333.23 KB) ” We examine foreign bribery and its enforcement using data from enforcement actions initiated under the U.S. Foreign Corrupt Practices Act (FCPA) from 1978 through May 2013. We estimate that 22.9% of Compustat-listed firms with foreign sales engaged in a program of prosecutable bribery at least once during our sample period, and that the probability a bribe-paying firm will face bribery charges is 6.4%. Bribes tend to be paid for important contracts, as the average ex ante NPV of a bribe-related contract is 2.6% of the firm’s market capitalization. The costs for firms that are prosecuted for bribery depend on whether the bribery is comingled with charges of financial fraud. Firms with comingled fraud charges face large fines, investigation costs, and reputational losses, such that the ex post NPV is negative. Bribe-paying firms without comingled fraud charges face significant fines and investigation costs, but do not, on average, lose reputation in a way that impedes future operations or profitability.
Finance Department Guest Seminar Archives 2010-Present | Carlson School of Management
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