The employment effects of anticorruption: Evidence from China

Xiangbing Xu, Nanyan Dong, Chengzhang Wu and Sicheng Luo

Emerging Markets Review, 2025, vol. 66, issue C

Abstract: This study examines whether China's anticorruption efforts affect firm employment. We find that Chinese provinces with higher pre-existing levels of corruption experience significant increases in the employment scale of listed firms post-campaign. Two channels through which anticorruption affects employment are identified: the mitigation of expropriation risk and the alleviation of financing pressure. The employment effects are more pronounced in firms with higher labor costs, lower management fees, and those located in regions with weaker marketization. Moreover, the campaign can mitigate underhiring and its effects on employment will not come at the expense of compensation or firm profitability.

Keywords: Anticorruption; Employment effects; Resource reallocation; Labor investment efficiency (search for similar items in EconPapers)
JEL-codes: J21 M51 P30 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:66:y:2025:i:c:s1566014125000391

DOI: 10.1016/j.ememar.2025.101290

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