Title
Investigating the Role of Executive Intrafirm Alumni Networks in Top Management Fraud: Multilevel Study in China's Construction Industry
Author
Wang, Ran (Hunan University)
Wang, Tongbing (Hunan University)
Lee, Chia-Jung (Tunghai University)
Liu, Zhengxuan (TU Delft Design & Construction Management; Hunan University)
Zhang, G. (Hunan University)
Date
2024
Abstract
To explore factors that influence the likelihood of committing fraud in the construction industry, this study concentrated on senior executives and tested whether some characteristics at the individual and firm levels have impacts on the likelihood of fraud committed by top management. Based on social network theory, this study first proposes that intrafirm alumni networks may increase the probability of senior executives engaging in corrupt behavior. Then the study explored whether the effect of executives' alumni networks on their wrongdoings is influenced by external and internal corporate governance measures. To verify the hypotheses, this study collected data on 2,017 senior executives from 118 construction companies in China from 2013 to 2021. Because of the multilevel structure of the data, hierarchical linear modeling was used. The results show that alumni networks have a significant positive effect on top management fraud. The effect is weakened by external auditing, altered by board independence, and strengthened by the size of the board of directors and the size of the supervisory board. This multilevel research contributes to advancing the understanding of managers' fraudulent behavior within an organization and extends the literature on social networks and corporate governance in the construction industry.
Subject
Alumni networks
Corporate governance
Hierarchical linear modeling
Social networks
Top management fraud
To reference this document use:
http://resolver.tudelft.nl/uuid:a67ddc88-90a3-4cd6-8da1-f40d630644f3
DOI
https://doi.org/10.1061/JMENEA.MEENG-5648
Embargo date
2024-06-13
ISSN
0742-597X
Source
Journal of Management in Engineering, 40 (2)
Bibliographical note
Green Open Access added to TU Delft Institutional Repository 'You share, we take care!' - Taverne project https://www.openaccess.nl/en/you-share-we-take-care Otherwise as indicated in the copyright section: the publisher is the copyright holder of this work and the author uses the Dutch legislation to make this work public.
Part of collection
Institutional Repository
Document type
journal article
Rights
© 2024 Ran Wang, Tongbing Wang, Chia-Jung Lee, Zhengxuan Liu, G. Zhang