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Foreign corporations and the culture of transparency: Evidence from Russian administrative data

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  • Braguinsky, Serguey
  • Mityakov, Sergey

Abstract

Firms from developed countries carry a culture of transparency in business transactions that is opposite to the culture of hiding and insider dealing in developing and transition economies. We employ Russian administrative data on reported earnings and market values of cars to measure wage misreporting for individual employees of domestic firms in Moscow. We show that closer ties to multinationals lead to improved transparency of wage reporting in private Russian companies. Employees located closest to movers from multinationals in the job quality space experience the largest gains in transparency. We find a robust correlation between wage misreporting and accounting fraud.

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  • Braguinsky, Serguey & Mityakov, Sergey, 2015. "Foreign corporations and the culture of transparency: Evidence from Russian administrative data," Journal of Financial Economics, Elsevier, vol. 117(1), pages 139-164.
    • Handle: RePEc:eee:jfinec:v:117:y:2015:i:1:p:139-164
    DOI: 10.1016/j.jfineco.2013.02.016
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    More about this item

    Keywords

    Culture; Transparency; Foreign corporations; Diffusion; Foreign direct investment;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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