Is the Chinese Anti-Corruption Campaign Authentic? Evidence from Corporate Investigations

115 Pages Posted: 20 May 2016 Last revised: 14 Nov 2020

See all articles by John M. Griffin

John M. Griffin

University of Texas at Austin - Department of Finance

Clark Liu

Tsinghua University - PBC School of Finance

Tao Shu

The Chinese University of Hong Kong, Shenzhen; Shenzhen Finance Institute

Date Written: June 7, 2020

Abstract

This paper examines whether the massive Chinese anti-corruption campaign ensnares corrupt firms, contains a political component, and reduces 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 executives investigated. However, affiliations with prominent investigated political leaders increase investigation likelihood while university affiliations with current central leadership decrease investigation likelihood, possibly indicating political favoritism. Except for reported entertainment expenditures and CEO pay, there has been little evidence of a substantial overall decrease 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 Anti-Corruption Campaign Authentic? Evidence from Corporate Investigations (June 7, 2020). 29th Annual Conference on Financial Economics & Accounting 2018, Finance Down Under 2019 Building on the Best from the Cellars of Finance, Paris December 2018 Finance Meeting EUROFIDAI - AFFI, PBCSF-NIFR Research Paper, 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)

The Chinese University of Hong Kong, Shenzhen ( email )

Shenzhen Finance Institute ( email )

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