Illicit Trade and Hofstede’s Cultural Dimensions

Abstract

Research purpose. Growth of illicit trade has markedly increased and caused damage to a multitude of economic, socio-economic and environmental outcomes. The purpose of this paper is to examine the impact of Hofstede’s country cultural dimensions on the attitudes towards illicit trade and the political will to counter the crime across countries.

Design/Methodology/Approach. The 2018 Global Illicit Trade index published by the Economics Intelligence Unit for 62 countries is empirically analysed. Six hypotheses are built and tested across Hofstede’s six cultural dimensions.

Findings. The results indicate that countries that are culturally more individualistic, have greater uncertainty avoidance and have a stronger long-term orientation have a stronger structural capacity to protect against illicit trade on average.

Originality/Value/Practical implications. In reference to originality, the paper adds to the scarce research on the fight against global illicit trade and empirically explores the role that culture plays in driving the attitudes towards illicit trade and the political will to fight the crime. In reference to practical implications, anti-illicit policy initiatives are likely to be more challenging in collectivist countries with lower uncertainty avoidance and a short-term orientation. Policymakers need to tailor their anti-illicit trade efforts in these countries as these societies will not likely place the same value on countering illicit trade as the countries that are culturally more individualistic, have greater uncertainty avoidance and have a strong long-term orientation.