Effects of anti-corruption on firm performance: Evidence from a quasi-natural experiment in China

Dongmin Kong, Li Wang and Maobin Wang

Finance Research Letters, 2017, vol. 23, issue C, 190-195

Abstract: We investigate the causal effects of anti-corruption on firm performance based on a quasi-natural experiment. Since 2013, China has implemented a national anti-corruption policy, and the Central Commission for Discipline Inspection has conducted five rounds of inspection on corruption covering all provinces. Difference-in-differences estimations show that although the anti-corruption campaign significantly improves firm performance of central state-owned enterprises (SOEs), such endeavor significantly reduces firm performance of non-state-owned enterprises (non-SOEs). Thus, the corruption could a double-edged sword and act as “sand-the-wheel” in central SOEs but “greasing-the-wheel” in non-SOEs. This paper provides critical insights and a serious challenge for regulators in China.

Keywords: Corruption; Central inspection teams; Quasi-natural experiment; Firm performance (search for similar items in EconPapers)
JEL-codes: G3 L2 P3 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:23:y:2017:i:c:p:190-195

DOI: 10.1016/j.frl.2017.05.011

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