Combined effect of economic variables on fraud, a survey of developing countries

Abstract

Recently, many researchers have examined the factors affecting fraud and introduced the elements required for fraud to exist. In this paper, we define these variables in two broad groups of economic and non-economic variables. We examine the combined effect of economic variables on fraud. We used 7 variables namely; fraud, the size of government, democracy, per capita income, inflation, the total value added of the industrial sector divided by GDP, and the total value added of the service sector divided by GDP. The predictive method used in this study is panel data. Our research findings show that democracy and GDP tend to have a reverse effect on fraud, whereas the size of the government and inflation are positively associated with fraud. Furthermore, we describe the association between industrial sector and fraud and also the service sector and fraud.