“Exhale the old and inhale the new”: Comparing the impact of anti-corruption campaign on entrepreneurship and exiting markets in China

Tie Wei, Huaihong Pan (), Bin Wei () and Chengyu Shi
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Tie Wei: Guangxi University
Huaihong Pan: Guangxi University
Bin Wei: Guangxi University
Chengyu Shi: Guangxi University

Small Business Economics, 2025, vol. 64, issue 3, No 25, 1515-1534

Abstract: Abstract Anti-corruption campaigns have a profound impact on all enterprise operations. We use China’s anti-corruption campaign, which began in 2012, as an example, employing inter-provincial data from 2006 to 2020 and a multi-temporal DID model, with the aim of exploring the relationship between the anti-corruption campaign, entrepreneurship, and enterprise exits from the market. We find that anti-corruption campaign both attracts entrepreneurship and causes enterprises to exit the market, but there are temporal differences in the effects on both. Meanwhile, we reveal paths involved. In addition, enterprises of different economic types have different entrepreneurial and exit market strategies in face of the anti-corruption campaign. While the anti-corruption campaign in general seems to have a double-edged sword effect, eliminated enterprises are inefficient and more favorable to China’s economic and social development. Our work contributes to the debate on relationships between anti-corruption campaign, entrepreneurship and exit markets.

Keywords: Anti-corruption; Entrepreneurship; Exiting markets (search for similar items in EconPapers)
JEL-codes: D73 L26 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11187-024-00934-y

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