Anti-Corruption Regulation and Shareholder Value: Evidence from China

50 Pages Posted: 5 May 2017 Last revised: 16 Dec 2020

See all articles by Bin Ke

Bin Ke

National University of Singapore

Na Liu

The Chinese University of Hong Kong, Shenzhen

Song Tang

Shanghai University of Finance and Economics - School of Accountancy; Shanghai University of Finance and Economics - Institute of Accounting and Finance

Date Written: December 16, 2020

Abstract

We examine the impact of China’s 2012 anti-corruption campaign, which primarily targeted the excesses of government officials and SOE executives, on individual firms’ shareholder value. We find that the anti-corruption campaign had a negative impact on the shareholder value of publicly listed Chinese firms that sell luxury goods and services. The campaign also significantly curtailed the luxury goods and services consumption by the publicly listed SOEs relative to the publicly listed non-SOEs. However, the overall impact of the campaign on shareholder value is negative for the SOEs relative to the non-SOEs. There is also evidence that the impact of the campaign is permanent. Our findings illustrate the complexities in the effects of the campaign on the behavior of publicly listed SOEs.

Keywords: China; anti-corruption regulation; luxury goods and services; firm performance; event study

JEL Classification: K42, M40, N25, N45, O12

Suggested Citation

Ke, Bin and Liu, Na and Tang, Song, Anti-Corruption Regulation and Shareholder Value: Evidence from China (December 16, 2020). Available at SSRN: https://ssrn.com/abstract=2963478 or http://dx.doi.org/10.2139/ssrn.2963478

Bin Ke (Contact Author)

National University of Singapore ( email )

Mochtar Riady Building, BIZ 1, #07-53
15 Kent Ridge Drive
Singapore, 119245
Singapore
+6566013133 (Phone)

Na Liu

The Chinese University of Hong Kong, Shenzhen ( email )

Song Tang

Shanghai University of Finance and Economics - School of Accountancy ( email )

No. 777 Guoding Road, Shanghai
Shanghai, 200433
China
86-21-6590 4842 (Phone)

Shanghai University of Finance and Economics - Institute of Accounting and Finance ( email )

Shanghai, 200433
China
86-21-6590 4842 (Phone)

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