Haste makes waste: Political entrepreneur’s rent-seeking choices in anti-corruption campaign

Jane Du, Cheng King and Xinxiang Shi

Journal of Policy Modeling, 2022, vol. 44, issue 3, 617-634

Abstract: This paper provides firm-level empirical evidence of the policy effects of China’s anticorruption campaign on SOE (state-owned enterprise) entrepreneur behaviour and corporate governance. While conflicts between corruption monitoring and performance of SOEs do exist, the 2012 anticorruption movement has profoundly changed Chinese political entrepreneurs’ power choice and accountability for SOE corporate governance. Specifically, this paper shows that the anticorruption measures have effectively reduced the sum of perks but aroused excessive asset extraction. When perk consumption has been seriously curtailed by the anticorruption rules, SOE executives’ reversed expectation precipitates their opportunistic activities in SOE’s tangible asset management and undermines SOE’s long-term corporate value.

Keywords: Executive perks; Tangible asset; Rent seeking; Anticorruption; State-owned enterprises (SOEs); Corporate governance; Corporate value (search for similar items in EconPapers)
JEL-codes: L25 M21 P37 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:44:y:2022:i:3:p:617-634

DOI: 10.1016/j.jpolmod.2022.05.005

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