The impact of international bribery on U.S. household stock investments

We find that international bribery violations in U.S. firms reduce U.S. households’ stock market investments. Revelations of such violations in a state reduce households’ stock market participation, diminish the portion of total household stock holdings within the household’s total wealth, decrease the probability that households enter the stock markets, and increase the probability that households exit from the stock market. Our results suggest that morality might be the mechanism by which bribery violations affect local household stock investments. © 2018, Springer Science+Business Media, LLC, part of Springer Nature.