State Sovereignty and Multinational Crime. How Private Networks Extend State Prohibition of Corporate Bribery Beyond Borders

Political economy has documented multinational companies' strategy to evade laws against criminal conduct by fragmenting structures across borders. In many issue areas, states attempt to regulate these criminal behaviors by negotiating common rules under international organizations (IOs). How do IO-negotiated rules enable state regulation of multinational companies? In this dissertation, three independent articles address this question focusing on anti-corporate corruption. They argue that states can leverage firms' cross-border ownership chains for regulatory purposes. The first article studies the impact of home-imposed anti-bribery laws on foreign investment. Similar policies are often argued to put regulated companies at a disadvantage abroad. Instead, the paper finds that home-imposed regulation can improve the competitive position of companies even in a range of corrupt economies. Thus, multinational corporate ownership can diffuse regulatory standards. The second article studies what makes public authorities apply their extraterritorial regulations against certain foreign companies. It finds that regulators leverage territorial connections of foreign companies in order to apply their extraterritorial criminal laws. Thus, corporate ownership enables enforcement of regulations. The third paper evaluates reputational sanctions imposed by investors on financial markets. It finds that firms suffer heavy losses on equity markets when they are directly involved in a corruption scandal, but they can minimize harm by hiding misconduct behind complex layers of corporate ownership. Thus, informal market-based penalties are not complete substitutes for formal state-based regulation. This thesis offers a detailed view on prospects for state coercive practices vis-à-vis multinationals. It shows that states can wield effective regulation against companies' cross-border misconduct by leveraging their very cross-border structure. Results speak to various literatures in political science, including those on corporate social responsibility, international law and organizations, and corruption. The dissertation also offers an important empirical contribution by collecting a novel dataset on anti-bribery enforcement events.