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Changing Ethical Attitudes: The Case of the Enron and ImClone Scandals


  • *Direct correspondence to Stephen J. Conroy, Associate Professor of Economics, School of Business Administration, University of San Diego, 5998 Alcala Park, San Diego, CA 92110-2492 〈〉. The authors will share all data and coding information with those wishing to replicate the study. The authors are indebted to Timur Kuran, Andy Karafa, Thuy Karafa, Carson Mencken, Peter Rosendorff, Joana Young, Justin Longenecker, Robert Conroy, Frank Pons, Susannah Stern, and three anonymous referees for helpful comments. They thank Yan Sun, Jun Chen (at Baylor), and Qian Wang (at the University of West Florida) for capable research assistance, and Baylor University and the University of West Florida for partial funding of this research. Emerson dedicates her work on this article to the memory of Justin Longenecker—a dear friend, mentor, and colleague. Any errors belong to the authors alone.


Objective. We analyze the process of changing ethical attitudes over time by focusing on a specific set of “natural experiments” that occurred over an 18-month period, namely, the accounting scandals that occurred involving Enron/Arthur Andersen and insider-trader allegations related to ImClone.

Methods. Given the amount of media attention devoted to these ethical scandals, we test whether respondents in a cross-sectional sample taken over 18 months become less accepting of ethically charged vignettes dealing with “accounting tricks” and “insider trading” over time.

Results. We find a significant and gradual decline in the acceptance of the vignettes over the 18-month period.

Conclusions. Findings presented here may provide valuable insight into potential triggers of changing ethical attitudes. An intriguing implication of these results is that recent highly publicized ethical breaches may not be only a symptom, but also a cause of changing attitudes.