multiple communities and controlling corruption corruption presents an assurance problem to businesses all businesses are best off if none act corruptly but in the event that corruption occurs are better off if they act corruptly than if they do not and because there is no assurance that other actors are not cheating a business does not know how to act the usual solution to an assurance problem criminal sanctions imposed on cheaters does not work in a corrupt system integrative social contract theory suggests a solution to the assurance problem application of integrative social contract theory to corruption demonstrates that in the case of corruption it has advantages over international law and that the theory s elegance lies in its recognition of norms generated by multiple communities

bribery in international business transactions globalization leads to cross border business transactions between societies with very different norms and regulations regarding bribery bribery in international business transactions can be seen as a function of not only the demand for such bribes in different countries but the supply or willingness to provide bribes by multinational firms and their representatives this study addresses the propensity of firms from 30 different countries to engage in international bribery the study incorporates both domestic economic development culture and domestic corruption in the supplying country and international factors those countries patterns of trade and involvement in international accords in explaining the willingness to bribe abroad the propensity to provide bribes was the lowest when corruption was not tolerated in the multinational firms home countries when the firms countries were signatories of the organization for economic cooperation and development oecd anti bribery convention and when those countries traded heavily with wealthier nations further these findings are maintained when controlling for levels of economic development and cultural values in the supplying country in terms of culture firms from high power distance countries showed a somewhat greater propensity for providing bribes in transactions with less developed nations

corporate social responsibility theories mapping the territory the corporate social responsibility csr field presents not only a landscape of theories but also a proliferation of approaches which are controversial complex and unclear this article tries to clarify the sit uation mapping the territory by classifying the main csr theories and related approaches in four groups 1 instrumental theories in which the corporation is seen as only an instrument for wealth creation and its social activities are only a means to achieve economic results 2 political theories which concern themselves with the power of corporations in society and a responsible use of this power in the political arena 3 integrative theories in which the corporation is focused on the satisfaction of social demands and 4 ethical theories based on ethical responsibilities of corporations to society in practice each csr theory presents four dimensions related to profits political performance social demands and ethical values the findings suggest the necessity to develop a new theory on the business and society relationship which should integrate these four dimensions

managing innovation optimal incentive contracts for delegated r d with double moral hazard abstract managing innovation involves double moral hazard because the principal delegates r d to a specialized agent and then makes decisions to apply the resulting invention double moral hazard is significant because innovation by the principal implies that the optimal incentive contract satisfies monotonicity conditions the analysis shows that the optimal incentive contract for delegated r d is an option delegated r d with simultaneous sampling results in shirking but delegated r d with sequential sampling attains the efficient outcome the analysis considers a combined problem with simultaneous and sequential search and gives sufficient conditions under which delegated r d attains the first best the discussion also considers delegated r d with stochastic innovation and with stochastic quality of inventions

the impact of corruption on investment predictability matters abstract this paper argues that it is not only level of corruption that affects investment but also the nature of corruption corruption regimes that are more predictable in the sense that those seeking favors from government do obtain those favors have less negative impact on investment than those that are less predictable using the data collected by world bank in preparing the world development report of 1997 we provide empirical support for the conjecture

the eonia spread before and during the crisis of 2007 2009 the role of liquidity and credit risk abstract this paper provides an empirical assessment of the factors affecting the spread between the euro overnight index average eonia and the main policy rate of the european central bank ecb up until the period when lehman brothers collapsed in mid september 2008 the spread was small and positive after this point the liquidity surplus that developed from the fixed rate full allotment tendering arrangement in refinancing operations drove the widening of eonia spread trading below the ecb policy rate although other factors also played a significant role this paper explains the drivers of spread across alternative non crisis crisis regimes in addition the paper examines how the eonia spread reacts to shocks imposed on a range of liquidity and credit risk factors in alternative crisis non crisis regimes the results have implications for factors that should be monitored closely across both regimes and also the implications that this may have for steering an unsecured overnight rate in crisis times

the daily market for funds in europe what has changed with the emu this paper shows that the existence of deposit and lending facilities combined with an averaging provision for the reserve requirement are powerful tools to stabilize the overnight rate we reach this conclusion by comparing the behavior of this rate in germany before and after the start of the emu the analysis of the german experience allows us to isolate the effects on the overnight rate of these particular instruments of monetary policy to illustrate that this outcome is a general conclusion and not a particular result of the german market we develop a theoretical model of reserve management which is able to reproduce our empirical findings

catalyzing corporate commitment to combating corruption this article considers what policy reforms may help catalyze corporate commitment to combating corruption the starting point for this discussion is a voluntary corporate principles approach to self regulation such an approach should seek to encourage corporations to implement effective compliance and ethics programs and to disclose information related to their anti corruption activities to relevant stakeholders although a corporate principles approach is a private initiative there is a significant role for the public sector this article discusses some of the ways that the public sector can support and further the goals of a corporate principles approach to combating corruption the reforms discussed in this article include amnesty programs for corporations that self disclose corrupt payments the use of corporate monitors in the enforcement of anti corruption laws expanding the definition of corruption in criminal laws sustainability reporting indicators related to bribery and the implementation of multi stakeholder initiatives to support a corporate principles approach

corruption and development a review of issues in this paper we start with a discussion of some of the different denotations of the problem of corruption we then consider the ways in which the damaging consequences of corruption operate in a developing economy while not ignoring its possible redeeming features in some cases we pursue the question of why corruption is perceptibly so different in different societies and also persistent finally we examine the feasible policy issues that arise in this context

a comparison of nigerian to american views of bribery and extortion in international commerce this study investigates the differences in the way bribery and extortion is perceived by two different cultures american and nigerian two hundred and forty american business students and one hundred and eighty nigerian business students were presented with three scenarios describing a businessman offering a bribe to a government official and three scenarios describing a businessman being forced to pay a bribe to an official in order to do business the reidenbach robin instrument was used to measure the ethical reactions of the two samples to these scenarios results indicate that ethical reactions to bribery and extortion vary by a the nationality of the person offering the bribe and b the country where the bribe is offered in addition nigerians perceived some of the scenarios as being less unethical than did americans

the foreign corrupt practices act the failure of the self regulatory model of corporate governance in the global business environment the american regulatory model of corporate governance rests on the theory of self regulation as the most effective and efficient means to achieve corporate self restraint in the marketplace however that model fails to achieve regular compliance with baseline ethical and legal behaviors as evidenced by a century of repeated corporate debacles the most recent being enron worldcom and refco seemingly impervious to its domestic failure congress imprinted the same self regulation paradigm on legislation restraining global business behavior the foreign corrupt practices act this anti bribery initiative prohibits unethical and illegal payments made to foreign public officials in an effort to eradicate bribery as a rational choice global market entry strategy however this paper illustrates using newly complied statistics from 1977 to 2008 that the fcpa has not had a dramatic impact on u s global corporate behavior despite its recent high profile coverage and the tough regulatory rhetoric about corporate compliance the paper also extends the prior cragg and woof fcpa efficiency study and provides current empirical evidence to resolve several unanswered questions raised by that earlier study

on the persistence of the eonia spread abstract the european overnight rate eonia signals the monetary policy stance of the european central bank controllability of the eonia requires that the persistence of the spread between the eonia and the key policy rate remains sufficiently low we apply fractional integration techniques to examine its changing persistence

testing for codependence of cointegrated variables we analyse nonstationary time series that do not only trend together in the long run but restore the equilibrium immediately in the period following a deviation while this represents a common serial correlation feature the framework is extended to codependence allowing for delayed adjustment we show which restrictions are implied for the moving average ma and vector error correction model vecm representations and put forward a generalized method of moments gmm test in addition for cases where the constraints can be uniquely imposed on a vecm a likelihood ratio test is proposed we apply the concept to us and european interest rate data examining the capability of the federal reserve bank fed and european central bank ecb to control overnight money market rates

fluidity of regulation csr nexus the multinational corporate corruption example corporate social responsibility csr is a relatively undeveloped concept despite its increasing importance to corporations one difficulty is the possible inexactness of csr another is the apparent reluctance by regulatory authorities and policy makers to intervene in the area this is largely a result of inhibitions created by traditional approaches to company law with emphasis on shareholder protection and financial disclosure the consequence is the stultification of independent development of csr by tying social issues to financial performance this attitude might not be unconnected to the theoretical and practical challenges in justifying csr and defining its scope the underlying impediment is a factual and theoretical failure to distinguish instrumental and pure ethical csr this article demonstrates that ethical csr highlights the role of regulation and a principal stance is that regulation is neither incompatible nor irreconcilable with ethical csr the article argues that cognizance of the intrinsic moral justification of pure csr is required for delineating the scope of csr as well as for clarifying the desirability and extent of its regulation it argues that the dynamic history and visage of multinational corporate corruption illuminates the fluidity of the regulation csr relationship the current and widening backlash against transnational corporate corruption is arguably a demonstration of the position that regulation and csr are not mutually exclusive and absolute concepts this article submits that recognition and application of this ethical and instrumental csr distinction is fundamental to the development of csr and resolution of connected questions of regulation

the price of international business morality twenty years under the foreign corrupt practices act last year marked the 20th anniversary of the foreign corrupt practices act fcpa of 1977 the fcpa is the first and only statute prohibiting bribery and other corrupt business practices by u s citizens and companies conducting business overseas this paper provides an overview of the fcpa during the two decades of its existence more specifically the objectives of this paper are four fold first the paper provides background information about the fcpa of 1977 and subsequent amendments in 1988 second the paper discusses the enforcement of the fcpa since its passage by examining the number of cases prosecuted under the fcpa and the respective penalties imposed third the paper discusses the economic impact of the fcpa by addressing whether the fcpa places u s firms at a competitive disadvantage fourth the paper provides public policy recommendations to expand the reach and scope of the fcpa it covers efforts to criminalize bribery through multilateral organizations such as the organization for economic cooperation and development oecd the world trade organization wto and the organization of american states oas it also covers bilateral arrangements and efforts by non governmental organizations such as transparency international

determinants of bribery in international business the cultural and economic factors corruption perceptions index cpi scores for 47 countries reported by transparency international were used to ascertain determinants of bribe taking in international business two sets of independent variables economic and cultural were used in a multiple regression analysis results indicate that bribe taking was more likely to be prevalent in countries with low per capita income and lower disparities in income distribution cultural factors such as high power distance and high masculinity in a country were also likely to be associated with high level of bribe taking both economic and cultural factors were important explanatory factors of bribery implications of the findings for combating bribery are discussed

are corruption indices a self fulfilling prophecy a social labeling perspective of corruption rankings of countries by perceived corruption have emerged over the past decade as leading indicators of governance and development designed to highlight countries that are known to be corrupt their objective is to encourage transparency and good governance high rankings on corruption it is argued will serve as a strong incentive for reform the practice of ranking and labeling countries corrupt however may have a perverse effect consistent with social labeling theory we argue that perceptual indices can encourage the loss of needed investment and thus contribute to higher rates of corruption within unfavorably ranked countries in effect corruption indices may inhibit foreign direct investment the effect of which is to encourage the status quo in terms of corruption ranking using an experimental study design we test the effects of country corruption rankings on the assessment of country investment desirability and find ranking exposure causes shifts in country investment desirability for 10 of 12 countries studied these findings suggest that corruption rankings which are based on perceptions of corruption may cause country isolation and a reduction in legitimate means of investment

the information content of eonia swap rates before and during the financial crisis abstract before august 2007 implied forward rates in the overnight interest swap rates closely reflected market expectations about the future path of the eonia and therefore about the future course of the ecb s monetary policy stance nevertheless this link was weakened considerably during the most acute episode of the financial crisis using the expectations hypothesis of the term structure as a benchmark model for the determination of the overnight interest swap rates we find that after may 2010 the monetary transmission mechanism was partially restored when the ecb implemented various unconventional measures in response to the financial crisis on the contrary liquidity and credit risks are still present in unsecured deposit markets distorting the pricing and transmission of the ecb monetary policy stance along the euribor rates these results should be of interest for regulators financial institutions and researchers in european money markets

fostering corporate social responsibility through public initiative from the eu to the spanish case should csr be approached only on a voluntary basis or should it be complemented with a compulsory regulatory framework what type of government intervention is more effective in fostering csr among companies this paper is an attempt to answer these questions reviewing the debate between proponents of the voluntary case and the obligatory case for csr and critically analysing current international government led initiatives to foster csr among companies and national government led initiatives in the eu area finally the paper focuses on the spanish case as an example of the failure of an exclusively voluntary approach despite the rapid uprise of csr spain is still far behind late in csr promotion strategies most action has been undertaken by companies themselves with no common guidelines governmental support or independent verification the lack of a regulatory framework for csr or ethical investment issues and the virtual absence of other indirect incentives explains the misbalance between private public and third sector initiatives based on the spanish context which is quite similar to other non oecd countries the authors call for a more proactive government position in csr related issues the conclusions of the paper detail the features of this regulatory framework and other policies to promote csr in spain as well as in other oecd countries

collective strategies in fighting corruption some intuitions and counter intuitions this article explores the plausibility of some intuitions and counter intuitions about the anti corruption efforts of mdbs and international organizations leveraging the power of the private sector regulation of a sizable percentage of global private sector actors now falls into a new area of international governance with innovative institutions standards and programs we wrestle with the role and value of private sector partnerships and available informal and formal social controls crafting proportional informal controls e g monitoring evaluations and sanctions and proper incentives to cooperative games across networks are the lynchpins of successful collective action programs ambivalence with informal social controls or effective incentives we argue risks far too much deference to private sector interests

monetary policy implementation and overnight rate persistence overnight money market rates are the predominant operational target of monetary policy as a consequence central banks have redesigned the implementation of monetary policy to keep the deviations of the overnight rate from the key policy rate small and short lived this paper uses fractional integration techniques to explore how the operational framework of four major central banks afiects the persistence of overnight rates our results suggest that a well communicated and transparent interest rate target of the central bank is a particularly important condition for a low degree of overnight rate persistence