The price of official-business collusion

Xiaohui Hou and Shuo Li

China Finance Review International, 2019, vol. 10, issue 1, 52-74

Abstract: Purpose - The purpose of this paper is to investigate whether the anti-corruption campaign, “Hunting the Tigers,” incurs a significant short-term loss of shareholders’ returns. Design/methodology/approach - A sophisticated event study approach is employed. Findings - The results show that the “Hunting the Tigers” has incurred a significant short-term loss of investment returns for shareholders in China’s main stock market board. In addition, the beginning of a new assault on China’s official mogul corruption in another round of political anti-corruption cycle after the 18th National Congress of the CPC has reduced this price significantly. Originality/value - This finding should be perceived as the price of the corruption of official-business collusion within capital markets in contemporary China.

Keywords: China; Event study; Anti-corruption; Official-business collusion; Stock market reaction; G14; D73 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:cfripp:cfri-07-2018-0114

DOI: 10.1108/CFRI-07-2018-0114

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