Embracing Fragility in Our Data: A Cautionary Example from Research on the FCPA and Voluntary Disclosure

Various agencies have acknowledged that they would take voluntary disclosure of FCPA misconduct into account in assessing the fine of a transgressing company. However, several scholars questioned whether companies would actually receive that benefit. Previous research set out to answer this question with the use of statistical analysis and found that voluntarily disclosing companies actually face stiffer penalties. While statistical analysis has not traditionally been used in the legal field, it can be a very powerful and beneficial tool. However, this tool must be utilized responsibly. The current study critiques the methods of previous research and finds several flaws which impact findings.