Dissertation Essays

Sanctioned Success: Private Self-regulation in Cross-border M&A Sanction Compliance

Summary: This study examines corporate compliance with sanctions in an era of privatized enforcement. It argues that compliance is more focused on specific firms and sectors rather than broad state-level risks when private self-regulation is emphasized. Using data on 8,365 cross-border mergers and acquisitions (M\&As) from 2016 to 2022, I find that firms are less concerned about “sketchy states” as risk proxies but intensify their compliance efforts if they operate in sanction-prone sectors after the introduction of an OFAC guideline that officially incorporates private governance in legal leniency assessment. Deals involving firms from sanctioned states or in sanction-prone sectors are generally associated with more compliance efforts—measured in longer due diligence periods—that correlate with lower success rates. The OFAC Framework reduced due diligence efforts on deals involving firms from sanctioned states, improving their success rates. Firms in sanction-prone sectors experienced even longer due diligence that further reduced success chances. This research highlights the nuanced dynamics of private governance in sanction compliance and suggests that states embrace rather than confront the market power to enforce economic statecraft in a globalized world.

When Do Private Governance Pay: Explaining Sanction Compliance Programs in Global Firms

Summary: Why do governments pursue private self-regulation when firms could decouple formal compliance and practical operations? Conventional explanations for private compliance cannot simultaneously explain why both the regulator and firms embrace such a regulatory regime. I build a game-theoretic model that demonstrates the strategic value of corporate self-regulation as a risk-screening device. Assuming regulatory violation is exogenous to corporate compliance efforts, I show that only high-risk firms engage in costly private self-regulation when doing so promises lenient punishment should non-compliance happen. This allows the regulator to identify high-risk firms for closer monitoring. Low-risk firms, on the other hand, have no incentive to participate in private self-regulation because the likelihood of violation and regulatory punishment is small. Even without assuming private self-regulation reduces non-compliance in practice, its risk-signaling function is a desirable property especially when the regulator confronts resource and information constraints in enforcement. This theoretical model accounts for two prominent features in the design of private self-regulation in economic sanction enforcement: the risk-based approach and leniency toward concrete compliance efforts.

Working Paper

Compliance is Taxing: An experiment on tax abatement information in the United States (With Nathan Jensen and Daniel Nielson)

Work in Progress

Privatizing Economic Sanction Compliance: Institutional Learning And the OFAC Adoption of Private Self-regulation

Guilty by Association? An Experimental Test of MVTS Compliance with International Law (With Daniel Nielson and Eoin Power)


Why China’s Economic Reforms Often Backslide, The Diplomat (With Meiying Xu)