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Monetary Intelligence and Behavioral Economics: The Enron Effect—Love of Money, Corporate Ethical Values, Corruption Perceptions Index (CPI), and Dishonesty Across 31 Geopolitical Entities

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Abstract

Monetary intelligence theory asserts that individuals apply their money attitude to frame critical concerns in the context and strategically select certain options to achieve financial goals and ultimate happiness. This study explores the dark side of monetary Intelligence and behavioral economics—dishonesty (corruption). Dishonesty, a risky prospect, involves cost–benefit analysis of self-interest. We frame good or bad barrels in the environmental context as a proxy of high or low probability of getting caught for dishonesty, respectively. We theorize: The magnitude and intensity of the relationship between love of money and dishonest prospect (dishonesty) may reveal how individuals frame dishonesty in the context of two levels of subjective norm—perceived corporate ethical values at the micro-level (CEV, Level 1) and Corruption Perceptions Index at the macro-level (CPI, Level 2), collected from multiple sources. Based on 6382 managers in 31 geopolitical entities across six continents, our cross-level three-way interaction effect illustrates: As expected, managers in good barrels (high CEV/high CPI), mixed barrels (low CEV/high CPI or high CEV/low CPI), and bad barrels (low CEV/low CPI) display low, medium, and high magnitude of dishonesty, respectively. With high CEV, the intensity is the same across cultures. With low CEV, the intensity of dishonesty is the highest in high CPI entities (risk seeking of high probability)—the Enron Effect, but the lowest in low CPI entities (risk aversion of low probability). CPI has a strong impact on the magnitude of dishonesty, whereas CEV has a strong impact on the intensity of dishonesty. We demonstrate dishonesty in light of monetary values and two frames of social norm, revealing critical implications to the field of behavioral economics and business ethics.

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Notes

  1. Most “geopolitical entities” are countries or nation-states. We have data from People’s Republic of China (China), Hong Kong, and Taiwan; treat China, Hong Kong, and Taiwan as separate geopolitical entities; and use the terms geopolitical entities or entities, thereafter, in this paper.

  2. 1 Timothy 6: 10.

  3. A high CPI score indicates a clean and ethical culture at the geopolitical entity level.

  4. The Matthew Effect: To anyone who has, more will be given, and he will grow rich; from anyone who has not, even what he has will be taken away (Matthew 13: 12).

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Acknowledgments

The senior author would like to thank Faculty Research and Creative Activity Committee of Middle Tennessee State University and all co-authors’ respective institutions for financial support, late Fr. Wiatt Funk, late Prof. Kuan Ying Tang, and Fang Chen Tang for their inspiration, and pay special tribute to Prof. Horia D. Pitariu who passed away on March 25, 2010.

Author information

Authors and Affiliations

  1. Department of Management, Jennings A. Jones College of Business, Middle Tennessee State University, Murfreesboro, TN, 37132, USA

    Thomas Li-Ping Tang

  2. Middle Tennessee State University, Murfreesboro, USA

    Toto Sutarso & Richard T. Mpoyi

  3. University of Lethbridge, Lethbridge, Canada

    Mahfooz A. Ansari

  4. National University of Singapore, Singapore, Singapore

    Vivien K. G. Lim & Thompson S. H. Teo

  5. Universidad Autónoma del Estado de Morelos, Mexico, Mexico

    Fernando Arias-Galicia

  6. Saratov State University, Saratov, Russia

    Ilya E. Garber

  7. Hong Kong Baptist University, Hong Kong, Hong Kong

    Randy Ki-Kwan Chiu

  8. University of Nantes, Nantes, France

    Brigitte Charles-Pauvers & Caroline Urbain

  9. University of Valencia, Valencia, Spain

    Roberto Luna-Arocas

  10. Ghent University, Ghent, Belgium

    Peter Vlerick

  11. Independent Research Collaboration, Pretoria, South Africa

    Adebowale Akande

  12. İpek University, Oran, Turkey

    Michael W. Allen

  13. Sultan Qaboos University, Muscat, Oman

    Abdulgawi Salim Al-Zubaidi & Ali Mahdi Kazem

  14. University of Malta, Msida, Malta

    Mark G. Borg

  15. National Taiwan University, Taipei, Taiwan

    Bor-Shiuan Cheng

  16. Polytechnic Institute of Lisbon – Portugal, Lisbon, Portugal

    Rosario Correia

  17. Lanzhou University, Lanzhou, China

    Linzhi Du

  18. Technological Institute of Monterrey, Monterrey, Mexico

    Consuelo Garcia de la Torre

  19. Suez Canal University, Ismaileya, Egypt

    Abdul Hamid Safwat Ibrahim

  20. National Sun-Yat-Sen University, Kaohsiung, Taiwan

    Chin-Kang Jen

  21. Sogang University, Seoul, South Korea

    Kilsun Kim

  22. Shanghai Jiao Tong University, Shanghai, China

    Jian Liang, Jingqiu Chen & Ningyu Tang

  23. University of Szeged, Szeged, Hungary

    Eva Malovics

  24. Federal University of Pará, Castanhal, Brazil

    Alice S. Moreira

  25. Nnamdi Azikiwe University, Awka, Nigeria

    Anthony Ugochukwu Obiajulu Nnedum

  26. FAMU, Tallahassee, Florida, USA

    Johnsto E. Osagie

  27. International Islamic University of Malaysia, Kuala Lumpur, Malaysia

    AAhad M. Osman-Gani

  28. Gümüşhane University, Gümüşhane, Turkey

    Mehmet Ferhat Özbek

  29. Lusófona University, Lisbon, Portugal

    Francisco José Costa Pereira

  30. Rangsit University, Pathum Thani, Thailand

    Ruja Pholsward

  31. Babes-Bolyai University, Cluj-Napoca, Romania

    Horia D. Pitariu

  32. University of Ljubljana, Ljubljana, Slovenia

    Marko Polic & Martina Trontelj

  33. University St. Cyril and Methodius, Skopje, Macedonia

    Elisaveta Gjorgji Sardžoska

  34. ALDI, Inc., Murfreesboro, USA

    Petar Skobic

  35. Andrews University, Berrien Springs, USA

    Allen F. Stembridge

  36. Tang Global Consulting Group, Franklin, TN, USA

    Theresa Li-Na Tang

  37. University of Padua, Padua, Italy

    Luigina Canova & Anna Maria Manganelli

  38. Economic Commission of West Africa, Abuja, Nigeria

    Bolanle E. Adetoun

  39. Mercer University, Atlanta, USA

    Modupe F. Adewuyi

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  1. Thomas Li-Ping Tang
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  44. Jingqiu Chen
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  45. Ningyu Tang
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  46. Bolanle E. Adetoun
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  47. Modupe F. Adewuyi
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Correspondence to Thomas Li-Ping Tang.

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Tang, T.LP., Sutarso, T., Ansari, M.A. et al. Monetary Intelligence and Behavioral Economics: The Enron Effect—Love of Money, Corporate Ethical Values, Corruption Perceptions Index (CPI), and Dishonesty Across 31 Geopolitical Entities. J Bus Ethics 148, 919–937 (2018). https://doi.org/10.1007/s10551-015-2942-4

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