Can Illegal Corporate Behavior be Predicted? An Event History Analysis

Abstract

A model of illegal corporate behavior was developed and tested for a 19-year period using event history analysis and data on clearly illegal acts. Results indicated that large firms operating in dynamic, munificent environments were the most likely of the firms studied to behave illegally, and firms with poor performance were not prone to commit wrongdoing. Membership in certain industries and a history of prior violations also increased the likelihood that a firm would behave illegally.