Is the Chinese Corporate Anti-Corruption Campaign Authentic?

109 Pages Posted: 20 May 2016 Last revised: 5 Jun 2018

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: March 15, 2018

Abstract

This paper examines whether the massive Chinese anti-corruption campaign is ensnaring corrupt firms, contains a political component, and is reducing corporate corruption. Consistent with the campaign’s stated objectives, Chinese firms with characteristics commonly associated with measures of poor governance, self-dealing, and inefficiencies are more likely to have investigated executives. However, affiliations with prominent investigated leaders increase investigation likelihood and executives with connections to top current central leadership is less likely to be investigated, possibly indicating political favoritism. Over time, there has been a sizeable decline in entertainment expenditures but little overall signs of decreases in measures of potential corporate corruption.

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 Corporate Anti-Corruption Campaign Authentic? (March 15, 2018). 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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