Innovation–Fraud amplification in technology-driven firms: Ecosystem-level drivers of corporate misconduct

Abstract

Corporate fraud in technology-driven sectors is increasingly recognized as a systemic phenomenon shaped by structural ecosystem conditions rather than solely by individual misconduct. Yet existing fraud frameworks, including the foundational Fraud Triangle and its principal extensions, remain anchored in individual psychology and offer limited theoretical tools for explaining how innovation environments actively amplify the mechanisms of pressure, opportunity, and rationalization. This study addresses that gap by examining how technological innovation ecosystems intensify all three Fraud Triangle dimensions simultaneously through ecosystem-level structural conditions. Using qualitative content analysis of regulatory filings, enforcement actions, court complaints, and government investigations, the study analyses seven major technology-related corporate scandals: OneCoin, Wirecard, WeWork, FTX, Theranos, Nikola, and Robinhood. A directed coding framework derived from the Fraud Triangle is combined with inductive analysis to identify nine amplifier categories recurring across cases. Findings demonstrate that capital-market valuation dynamics and milestone urgency intensify structural pressure; the co-occurrence of founder-dominated governance and proprietary technological opacity produces stacked opportunity structures resistant to both internal and external oversight; and innovation legitimacy narratives and mission-driven moralization institutionalize rationalization at the organizational level. These dynamics reflect what this study conceptualizes as innovation–fraud amplification, a structural configuration in which ecosystem conditions collectively intensify the pressure, opportunity, and rationalization dimensions of fraud. The study introduces fraud amplifiers as analytically distinct from traditional fraud causes or enablers, and advances a multi-level, ecosystem-based framework with practical implications for governance, regulatory design, and independent board oversight in technology-intensive sectors.