Is the Chinese Anti-Corruption Campaign Effective?

84 Pages Posted: 20 May 2016 Last revised: 1 Oct 2016

John M. Griffin

University of Texas at Austin - Department of Finance

Clark Liu

Tsinghua University - PBC School of Finance

Tao Shu

University of Georgia - Department of Finance

Date Written: May 11, 2016

Abstract

Chinese firms with characteristics commonly associated with corporate self-dealing are more likely to have executives investigated by the anti-corruption campaign. University affiliations with the top current leaders are associated with a reduced probability of investigation, but general political affiliations are associated with more investigations. We then assess the campaign’s effect on Chinese firms more broadly, and find that with the exception of entertainment expenditure there has been little overall decrease in measures of potential corporate self-dealing. Overall, our findings suggest that the campaign is targeting corrupt managers, could contain a political component, and has yet to change Chinese corporate culture.

Keywords: Anti-Corruption Campaign, China, Corrupt Managers, Corrutpion Measures, Corporate Culture

Suggested Citation

Griffin, John M. and Liu, Clark and Shu, Tao, Is the Chinese Anti-Corruption Campaign Effective? (May 11, 2016). Available at SSRN: https://ssrn.com/abstract=2779429 or http://dx.doi.org/10.2139/ssrn.2779429

John M. Griffin

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-6621 (Phone)

HOME PAGE: http://www.jgriffin.info

Clark Liu

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengdu Road
Haidian District
Beijing 100083
China

Tao Shu (Contact Author)

University of Georgia - Department of Finance ( email )

Department of Finance
Terry College of Business, University of Georgia
Athens, GA 30602
United States

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