ABSTRACT |Despite prosecutors’ difficulties in proving advanced forms of corporate bribery, nearly all enforcement actions end with a settlement at the pre-trial stage. Applying existing theory, we find that an alleged corporate offender’s inclination to accept an offered settlement depends critically on the expected sanction gap, that is, the difference between the settlement result and the expected outcome if the case were to go to trial. Due to factors such as the sanction range in court, sanction range in a settlement, and outcome predictability, there is substantial variation in the sanction gap across countries, with a typically smaller gap in Europe than in the United States. This means that European governments’ current escalation of enforcement of corporate bribery laws will lead to a mixture of settlements and court decisions, while in the United States firms will continue to negotiate settlements as if there were no opportunity to have their cases tested in court.
BIO | KASPER VAGLE IS A RESEARCH SCHOLAR AT THE NORWEGIAN SCHOOL OF ECONOMICS (NHH). HE RECEIVED HIS DOUBLE MASTER’S DEGREE IN STRATEGY AND MANAGEMENT, AND INTERNATIONAL MANAGEMENT (CEMS) FROM NHH IN 2017. HIS MAIN RESEARCH INTERESTS ARE CORRUPTION, AND DETERRENCE OF CORPORATE MISCONDUCT.
ORGANIZED BY POLITICAL ECONOMY RESEARCH GROUP (PERG)
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