Eat, Drink, Firms, Government: An Investigation of Corruption from the Entertainment and Travel Costs of Chinese Firms
Hongbin Cai (),
Hanming Fang and
Lixin Xu
Journal of Law and Economics, 2011, vol. 54, issue 1, 55 - 78
Abstract:
We propose entertainment and travel costs (ETC) expenditures as a measure of corruption in Chinese firms. These expenses are publicly reported in firms' accounting books, and on average they amount to about 3 percent of a firm's total value added. We find that ETC is a mix that includes grease money to obtain better government services, protection money to lower tax rates, managerial excesses, and normal business expenditures to build relational capital with suppliers and clients. Entertainment and travel costs overall have a significantly negative effect on firm productivity, but we also find that some components of ETC have substantial positive returns to firms.
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (263)
Downloads: (external link)
http://dx.doi.org/10.1086/651201 (application/pdf)
http://dx.doi.org/10.1086/651201 (text/html)
Access to the online full text or PDF requires a subscription.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/651201
Access Statistics for this article
More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().