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Financial misconduct and employee mistreatment: evidence from wage theft

Raghunandan, Aneesh (2021) Financial misconduct and employee mistreatment: evidence from wage theft. Review of Accounting Studies. ISSN 1380-6653 (In Press)

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This article investigates how discourses on open networking technologies provide a social imaginary that industry and government actors mobilize in an attempt to expand their control over mobile telecommunications networks. The case of recent initiatives aiming to “open up” radio access network (or RAN, a key component of telecommunications infrastructure) with an “open RAN” model reveals how the US Government came to promote this nascent technology to create an opposition between its own “open” telecommunications networks versus proprietary and presumed “untrustworthy” networks based on foreign equipment, namely Huawei. While a closer look casts doubts on the benefits of open RAN to increase network security or to open up the equipment market, this case reveals how openness is an ambiguous notion that can be used by governments to exclude foreign trade enemies while advocating for trust in telecommunications networks. I examine the relation between firms’ financial conduct and wage theft. Wage theft represents the single largest form of theft committed in the United States and primarily affects firms’ most vulnerable employees. I show that wage theft is more prevalent (i) when firms just meet or beat earnings targets and (ii) when executives’ personal liability for wage theft decreases. Wage theft precedes financial misconduct while the theft is undetected, but once firms are caught engaging in wage theft they are more likely to shift to engaging in financial misconduct. My findings highlight an economically meaningful yet previously undocumented way in which firms’ financial incentives relate to employee treatment.

Item Type: Article
Official URL:
Additional Information: © 2021 Springer Science+Business Media, LLC, part of Springer Nature
Divisions: Accounting
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
JEL classification: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
J - Labor and Demographic Economics > J8 - Labor Standards: National and International > J83 - Workers' Rights
K - Law and Economics > K3 - Other Substantive Areas of Law > K31 - Labor Law
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M14 - Corporate Culture; Social Responsibility
M - Business Administration and Business Economics; Marketing; Accounting > M4 - Accounting and Auditing > M41 - Accounting
Date Deposited: 14 Apr 2021 10:24
Last Modified: 21 Apr 2021 23:17

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