The Effects of Corporation- and Industry-Level Strain and Opportunity on Corporate Crime

Abstract

Although recent corporate crime studies have made important advances by investigating how individuals decide to offend, they have paid limited attention to a corporation’s organizational structures. Yet, the extant organizational studies have generated inconclusive evidence when assessing the relationship between financial performance and corporate crime, and few studies have combined organizational and industrial factors in models of corporate crime. Building on strain and opportunity theories and prior research, the authors develop hypotheses about the direct and interactive effects of corporation- and industry-level strains and opportunity structures. The authors test these hypotheses using Clinard and Yeager’s Illegal Corporate Behavior data. In short, the results indicate that the effect of corporation-level strain is more pronounced for corporations marked by lower levels of diversification and corporations that operate in industries experiencing higher levels of strain. The authors discuss the implications of the findings for theory, research, and policy.