Informal Sanction Threats and Corporate Crime: Additive Versus Multiplicative Models

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Abstract
Using data drawn from a factorial survey, this research examines the degree to which decisions to engage in corporate crime are affected by perceived informal sanction threats. Specifically, the analysis examines whether the perceived risk of informal detection and social costs associated with that risk inhibit offending decisions in an additive or interactive manner. Perceived formal sanction threats at the individual and firm levels and moral beliefs concerning the illegal activity are included as control variables in this analysis. Findings indicate that the perceived risk of informal detection and the perceived social costs of informal detection do not decrease levels of intended behavior in either an additive or multiplicative fashion. However, informal sanction certainty, perceived immorality of the act, and several individual- and firm-level characteristics are related significantly to offending decisions.