DOES CORPORATE LOBBYING CREATE POLITICAL CONNECTEDNESS TO HELP AVOID FOREIGN CORRUPT PRACTICES ACT ENFORCEMENT ACTIONS?

Devon Baranek, Rider University, U.S.A.
Maria H. Sanchez, Rider University, U.S.A.

Published in

JOURNAL OF INTERNATIONAL FINANCE AND ECONOMICS
Volume 19, Issue 4, p15-24, December 2019

ABSTRACT

The Foreign Corrupt Practices Act of 1977 (FCPA) is intended to prevent persons and companies from bribing foreign government officials in order to obtain or retain business. The Securities and Exchange Commission and the U.S. Department of Justice enforce the FCPA. This Act is meant to apply equally to all U.S. persons and certain issuers of securities. However, some prior research suggests that the Act is not enforced equally among all entities. This paper examines whether corporate lobbying creates political connectedness that allows firms to avoid FCPA enforcement actions and whether corporate lobbying creates political connectedness that mitigates the severity of fines and penalties associated with FCPA enforcement actions. Given the recent increase in FCPA prosecutions, this research is timely and should be of interest academics, regulators and industry.

Keywords

Foreign Corrupt Practices Act, lobbying, political connectedness


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