Abstract
Fighting against corruption is an important policy of the new Chinese government. A series of anti-corruption policies has been promulgated since the end of 2012. In this paper, we study the impact of these policies on firms’ three public consumptions (TPCs): car expenses, banquet expenses, and overseas visit expenses. The empirical results show that the TPCs decrease sharply after the promulgation of the anti-corruption policies. The decline in the TPCs in state-owned enterprises (SOEs) is larger than that in private firms (non-SOEs). Further, the decline in the TPCs in firms with top managers with a political background (such as government work experience, army experience, or being party members) is larger than that in firms with top managers with a non-political background. The decrease in the TPCs in high-marketisation (high legal development) regions is not as sharp as that in low-marketisation (low legal development) regions since the TPCs in these economically well-developed (legally well-developed) regions were lower before the anti-corruption campaign. What is more, the effect of the anti-corruption policies also depends on the strength of their enforcement: that is, the higher the strength of the enforcement of the anti-corruption policies, the larger the decrease in the growth rate of the TPCs. All these results evidence a significant effect of the anti-corruption policies.
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JEL classification: K20, P48
We appreciate the helpful comments and suggestions from an anonymous referee, Zhifeng Yang, Ying Cao, Shengquan Hao, Fei Pan, Hongjun Zhu, and Yiyun Chu. Shuang Xue acknowledges financial support from the National Science Foundation of China (Project No. 71572102 and Project No. 71402086), the MOE Project of Key Research Institutes of Humanities and Social Sciences in Universities (16JJD790038), and the Program for New Century Excellent Talents in Universities (NCET-13-0893) and Program for Innovative Research Team of SHUFE.
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Xue, S., Wang, Q. & Zhao, Z. Anti-Corruption Policy and Firms’ Three Public Consumptions. China Account Financ Rev 18, 14 (2016). https://doi.org/10.7603/s40570-016-0014-5
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DOI: https://doi.org/10.7603/s40570-016-0014-5