The culprit behind bootleg music: The diverging roles of formal and informal institutions

We revisit the roles of institutional environments in deterring ethically questionable activities conducted through digital channels, focusing on the release of digital bootleg music across countries. Whereas stronger digital regulations aim to deter such activities, we submit that informal institutions in some countries may diverge from formal regulations, creating demand-side opportunities that attract digital bootleggers. This divergence is further intensified in countries with high levels of digital usage, where advanced technological tools enable users to bypass regulatory barriers and access bootlegged content. Consequently, increasing digital usage intensifies the divergence between formal and informal institutions, undermining the effectiveness of digital regulations. Using a large dataset on bootleg music releases across 82 countries, we find empirical support for our theoretical contentions.