Who gets caught for corruption when corruption is pervasive? Evidence from China’s anti-bribery blacklist
Zhangfeng Jin () and
Applied Economics Letters, 2017, vol. 24, issue 4, 258-263
This article empirically investigates why in a corruption-pervasive country only a minority of the firms get caught for bribery while the majority get away with it. By matching manufacturing firms to a blacklist of bribers in the healthcare sector of a province in China, we show that the government-led blacklisting is selective: while economically more visible firms are slightly more likely to be blacklisted, state-controlled firms are the most protected compared to their private and foreign competitors. Our finding points to the fact that a government can use regulations to impose its preferences when the rule of law is weak and the rule of government is strong.
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