The Impact of National Culture on Financial Crime: A Cross Country Analysis

Although laws, rules and regulations are existing, financial crimes is a widespread phenomenon. Panama Leaks has proved that people from all over the world are participating in money laundry and financial crimes. In this study, we have investigated the influence of national culture on financial crimes across 78 countries. Using Hofstede’s cultural framework as a basis for our hypotheses and Basel Anti-Money Laundering (AML) Index as a proxy for financial crimes. The results have shown that the financial crime increases if the country’s profile is characterized by low uncertainty avoidance, low individualism, high masculinity, and low long-term orientation. Laws, regulations and sanctions are not the only factors that can help in deterring the crime, but the government has to go through a holistic approach that includes cultural factors as well.