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Is a Uniform Approach to Whistle-Blowing Regulation Effective? Evidence from the United States and Germany

Author

Listed:
  • Gladys Lee

    (The University of Melbourne)

  • Esther Pittroff

    (University of Leipzig)

  • Michael J. Turner

    (The University of Queensland, UQ Business School)

Abstract

The purpose of this study is to examine whether United States (U.S.)-style regulatory intervention to encourage whistle-blowing can be immediately effective if transplanted into another country with a distinctly different historical cultural background and institutional system. A total of 98 U.S. and 84 German accountants participated in a laboratory experiment relating to a case of financial statement fraud. The provision of anti-retaliation protection and monetary rewards for whistle-blowing were manipulated and participants were asked to assume the role of an internal auditor. We hypothesize and find that the provision of anti-retaliation protection and monetary rewards encourage U.S. accountants to blow the whistle. In contrast, among German accountants, where their country features a historical fear and distrust of whistle-blowers, U.S.-style regulatory interventions are less effective. Together, our findings provide strong support for the theory of path-dependence, suggesting that whistle-blowing regulation should not be uniformly transplanted without due consideration of the unique history and culture of a country.

Suggested Citation

  • Gladys Lee & Esther Pittroff & Michael J. Turner, 2020. "Is a Uniform Approach to Whistle-Blowing Regulation Effective? Evidence from the United States and Germany," Journal of Business Ethics, Springer, vol. 163(3), pages 553-576, May.
    • Handle: RePEc:kap:jbuset:v:163:y:2020:i:3:d:10.1007_s10551-018-4023-y
    DOI: 10.1007/s10551-018-4023-y
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