The Impact of Intelligence on Economic and Financial Crime: A Cross-Country Study

Achim, Monica Violeta; Borlea, Sorin Nicolae; Văidean, Viorela Ligia; Rus, Alexandra Ioana Daniela; Dobre, Florin

doi:10.1142/s0217590820500782

Cited by 8 publications

(14 citation statements)

References 66 publications

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“…At the international level, states have not agreed to provide a unified definition for economic and financial crimes (Leţia, 2014). For instance, US Legal (2020) reveals that cybercrimes, tax evasion, robbery, selling of controlled substances and abuses of economic aid are all examples of financial crimes (Achim et al , 2021). Moreover, Gottschalk (2010) presented a systematic approach to classify financial crime into main categories; labelled as corruption, fraud, theft and manipulation; with 14 other sub-categories (includes kickbacks, bribery, extortion, embezzlement, identity fraud, mortgage fraud, occupational fraud, money laundering, cybercrime, bid-rigging and insider trading) under the main categories.…”

Section: Understanding the Landscape Of Financial Crimes During A Cov...mentioning

confidence: 99%

The Covid-19 impact on financial crime and regulatory compliance in Malaysia

Jamil

Sanusi

Yaacob

et al. 2021

JFC

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Purpose The purpose of this paper is to provide a conceptual discussion and analysis of the Covid-19 impact on financial crime and regulatory compliance. The analysis is conducted to make a comparison of the financial crime and regulatory compliance patterns before and after the Covid-19 pandemic occurred. Design/methodology/approach This paper contextualises the impact of Covid-19 on financial crime and regulatory compliance. Moreover, this paper explores different ways of conceptualising the Covid-19 impacts in terms of financial crimes and regulatory compliance patterns based on the surveys by PricewaterhouseCoopers and Deloitte. Findings The Covid-19 pandemic has brought both challenges and opportunities to financial crime and regulatory compliance. In the aspects of financial crime patterns, this study found a reduction in physical crime whilst on the other hand increment in cybercrime. Nevertheless, this study discovered regulatory compliance not at a satisfactory stage even before the Covid-19 pandemic, let alone during the pandemic. Practical implications This study implies that the financial institutions must work together to combat the risks of financial crimes, not only amongst the institutions but also with the regulators. Digitalisation and robust risk management need to be improved at a massive level to beat the criminals’ high fintech skills and systems. The initiatives of fund packages from the governments to assist the companies especially the small firms need to be fully used by the companies to improve regulatory compliance. Originality/value Whilst some studies discussed the impact of Covid-19 on the economy, there are still scarce resources on the comparative analysis on the financial crime and regulatory compliance, not to mention the before and after effect of the Covid-19 pandemic. This is the first paper to integrate the issues surrounding the Covid-19 impact, financial crimes and regulatory compliance in Malaysia.

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Section: Understanding the Landscape Of Financial Crimes During A Cov...mentioning

confidence: 99%

The Covid-19 impact on financial crime and regulatory compliance in Malaysia

Jamil

Sanusi

Yaacob

et al. 2021

JFC

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“…A number of interdisciplinary cross-country investigations have demonstrated that unlawful acts undertaken by an individual or group of people to extract financial gains, such as corruption and money laundering, are explained by national intelligence (see, e.g. Potrafke, 2012; Achim et al , 2020). The current study demonstrates that illicit trade too is explained by national intelligence.…”

Section: Discussionmentioning

confidence: 99%

“…Several different outcome variables have been associated with national average IQ such as corruption (Potrafke, 2012; Achim et al , 2020), economic growth (Ram, 2007), economic welfare (Hafer, 2017), earnings management practices (Loy, 2018), gender inequality (Salahodjaev and Azam, 2015), happiness (Stolarski et al , 2015), product sophistication (Lapatinas and Litina, 2019), quality of institutions (Kanyama, 2014) and shadow economy (Salahodjaev, 2015). This has led Lynn and Vanhanen (2012) to describe intelligence as being “a unifying construct for the social sciences.”…”

Section: Related Literature and Hypothesis Developmentmentioning

confidence: 99%

“…While recent studies indicate that cultural and economic factors make a significant influence on illicit trade (DiRienzo and Das, 2020), we consider an explanatory variable which has not obtained the attention we believe it merits in the study of cross-country variations in illicit trade, namely, average national IQ. With the publication of Lynn and Vanhanen’s (2012) national IQ data, some scholars (Salahodjaev, 2015; Achim et al , 2020) began to investigate the role played by average national IQ with regard to corruption, money laundering and shadow economy. At the same time, the findings of these scholars seem to provide support to the idea that national IQ impacts the above-mentioned variables, the association between national IQ and illicit trade is another promising avenue of investigation.…”

Section: Introductionmentioning

confidence: 99%

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National intelligence and illicit trade: a cross-country study

Baatour

Khalfaoui

Guenichi

2023

JFC

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Purpose Illicit trade is pervasive in many nations and may be influenced by the level of national IQ. The current interdisciplinary paper aims to study the association between national intelligence and illicit trade across nations. Design/methodology/approach The illicit trade index scores for 84 countries, developed by the Economics Intelligence Unit, are used to measure the dependent variable. The independent variable is national intelligence, while economic development, unemployment and Hofstede’s cultural dimensions are the control variables. Two-level hierarchical linear models (HLMs) are used to empirically test the above-mentioned association. Findings The empirical results suggest that the higher the degree of national intelligence, the lower is the degree of illicit trade across nations. In addition, economic development, unemployment and national culture play an important role in explaining cross-country differences in illicit trade. Practical implications Regulatory authorities should find the results of this cross-national research useful in evaluating the likelihood of illicit trade from a cognitive perspective, and in implementing reforms to curb this type of economic crimes. Originality/value This interdisciplinary study makes novel contributions to the literature on economic and financial crimes. First, for the first time to the best of the authors’ knowledge, an association between national intelligence and illicit trade is examined. A second original contribution of this study compared to earlier research is related to the use of two-level HLMs. Third, the investigation of the association between intelligence and illicit trade takes a new control variable into consideration, i.e. unemployment, a variable which is found to have a significant effect on illicit trade and that has not been used directly in relationship with illicit trade so far.

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“…In addition, a higher educational level determines a higher level of understanding and respecting the laws. This improved understanding is associated with a smaller economic and financial crime and the shadow economy [ 69 ]. [ 67 ] argues that human capital negatively affects emerging shadow activities.…”

Section: Literature Reviewmentioning

confidence: 99%

Does national intellectual capital matter for shadow economy in the Southeast Asian countries?

Tran

Nguyen

et al. 2022

PLoS ONE

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Understanding the determinants of the shadow economy plays a vital role in formulating policies for economic growth and development, particularly for the Southeast Asian countries–a new economic force for a global economy. The key drivers of a shadow economy, such as institutional quality, taxation, government expenditure, are widely examined. However, the effect of national intellectual capital, which affects macroeconomic indicators, on the shadow economy has largely been ignored in the existing literature. Our paper examines this critical link and its causality relationship for eight Southeast Asian countries from 2000 to 2017. This paper uses the dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS), which allow cross-sectional dependence and slope homogeneity in panel data analysis. Empirical findings from this paper indicate that national intellectual capital impacts negatively and significantly the shadow economy size. This finding implies that enhancing national intellectual capital reduces the shadow economy size. These two forces lead to enhanced economic growth. Our Granger causality tests confirm a bi-directional relationship between national intellectual capital and the shadow economy. As a result, policies targeted to reduce the shadow economy size can now include the accumulation of national intellectual capital, particularly for Southeast Asian Countries.

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The Impact of Intelligence on Economic and Financial Crime: A Cross-Country Study

Cited by 8 publications

References 66 publications

The Covid-19 impact on financial crime and regulatory compliance in Malaysia

The Covid-19 impact on financial crime and regulatory compliance in Malaysia

National intelligence and illicit trade: a cross-country study

Does national intellectual capital matter for shadow economy in the Southeast Asian countries?

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