Abstract
Studies have shown that increased competition can lead firms to make unethical choices or in some cases engage in illegal activity. Given such studies take place in settings where it is difficult for competitors or regulators to observe potential misconduct in real time, examining the role of competitors in monitoring misconduct presents a research opportunity. This study argues that when competitors can observe firm activity in real time, the presence of competitors can have a monitoring effect on likelihood of misconduct. The study uses high resolution spatial and temporal data on commercial fishing vessels in the context of international fishing. The study shows that the presence of competitors does appear to have a monitoring effect on likelihood of misconduct, and this monitoring effect is weaker at close distances due to endogenous location choice of focal vessels. From a policy perspective, regulators and enforcement agencies may benefit from using private incentives for competitors to report potential misconduct.