Is the Chinese Corporate Anti-Corruption Campaign Authentic?
109 Pages Posted: 20 May 2016 Last revised: 5 Jun 2018
Date Written: March 15, 2018
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
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