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Defending the shell: differential effects of delisting pressure on R&D intensity and bribery expenditure

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Abstract

In the context of the unique Chinese delisting system and drawing on institutional theory, this paper studies the impacts of delisting pressure on corporate risk-taking activities. We find that firms under delisting pressure are less likely to engage in aspirational risk taking, such as Research and development (R&D), and more likely to exhibit deviant risk–taking behavior, such as bribery. Developing our framework and hypotheses in line with contingency theory, we find that industry competition and economic policy uncertainty strengthen the negative relationship between delisting pressure and corporate R&D expenditure. Political transparency, in contrast, weakens the positive impact of delisting pressure on corporate bribery expenditure. Additional analyses reveal that SOEs tend to reduce their R&D intensity, whereas non-SOEs tend to increase their bribery expenditure when they are under delisting pressure. This paper concludes with a discussion of the limitations for this study and suggestions for future research.

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Authors and Affiliations

  1. School of Business Administration, South China University of Technology, 381 Wushan Road, Tianhe District, Guangzhou, Guangdong, China

    Liuyang Ren & Liangyong Wan

  2. School of Management, Guangdong University of Technology, 161 Yinglong Road, Tianhe District, Guangzhou, Guangdong, China

    Xi Zhong

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Ren, L., Zhong, X. & Wan, L. Defending the shell: differential effects of delisting pressure on R&D intensity and bribery expenditure. Rev Manag Sci 16, 1437–1470 (2022). https://doi.org/10.1007/s11846-021-00489-2

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