Effect of Corruption Control on Financial Performance and Market Value: A Multilevel Analysis of Latin American Companies

• Autor(a) principal: Cordeiro Júnior, Edson Carlos
• Data de Publicação: 2024
• Outros Autores: Carvalho, Luciana, Tomaz, Lívia Bononi Paiva
• Tipo de documento: Artigo
• Idioma: por; eng
• Título da fonte: Revista Catarinense da Ciência Contábil (Online)
• Texto Completo: https://revista.crcsc.org.br/index.php/CRCSC/article/view/3498
• topic: Performance; Market value; Corruption control; Latin America; Multilevel regression; Desempenho; Valor de mercado; Controle de Corrupção; América Latina; Regressão multinível

Organizations have increasingly focused on performance and market value, as demonstrated by recent national and international studies. Another notable point is the impact of corruption on the organizational environment. This concern primarily arises from recent discoveries of crimes involving major companies and the highest levels of government. This work aims to establish a relationship between these two themes. For this reason, this study intends to explain how financial performance and market value of companies behave depending on the country-level control of corruption. The country-level corruption control used will be the World Bank metric, which establishes a kind of corruption ranking for countries. The sample will consist of Latin American countries: Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Jamaica, Mexico, and Peru, covering the period from 2012 to 2022. To achieve the objective of this research, the Multilevel Linear Model was used, which allows for the alignment of variables at different levels, in this case, country level and company level. The results suggest a significant positive relationship between performance, market value, and country-level corruption control, indicating that corruption can act as a sort of sand in the gears of organizations. This suggests that as countries manage to control and primarily reduce their levels of corruption, the financial performance and market value of companies located in Latin American countries improve. As a suggestion for future research, it is proposed that the same analytical method be applied in other regions, comparing performance and market value to better understand global corruption aspects.