IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v57y2019ics1043951x19301002.html
   My bibliography  Save this article

Corruption and private firms' survival in transition economies: Evidence from China

Author

Listed:
  • Zhang, Jianhong
  • Quan, Shifan
  • Jiang, Jiangang

Abstract

This article explores whether and how regional corruption determines private firms' survival in transition economies from a political favoritism perspective. We argue that regional corruption facilitates the likelihood of private firms' survival, but the magnitude to which private firms' survival responses to corruption is contingent on not only officials' power and power stability but also firms' power. Building on firm-level data and regional registered cases of corruption from 1998 to 2012, the findings confirm that corruption has a positive effect on private firms' likelihood of survival in China. Our studies also demonstrate that the positive effect is strengthened before the 16th National Congress of the Chinese Communist Party in 2002, in the case of regulated industry, regional leadership stability, large size, low export and privatized firms. Asset turnover and credit are viewed as the channels through which corruption fosters private firms' likelihood of survival.

Suggested Citation

  • Zhang, Jianhong & Quan, Shifan & Jiang, Jiangang, 2019. "Corruption and private firms' survival in transition economies: Evidence from China," China Economic Review, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:chieco:v:57:y:2019:i:c:s1043951x19301002
    DOI: 10.1016/j.chieco.2019.101339
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X19301002
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2019.101339?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Le, Anh-Tuan & Doan, Anh-Tuan & Phan, Thu, 2021. "Institutional development and firm risk from a dynamic perspective: Does ownership structure matter?," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 342-357.
    2. Bessonova, Evguenia, 2023. "Firms’ efficiency, exits and government procurement contracts," European Journal of Political Economy, Elsevier, vol. 76(C).
    3. Nam Pham Xuan & Thanh Ha Le, 2023. "Bribery and firm survival in Vietnam: Moderating effects of market competition, credit, and institutional constraints," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 1242-1269, May.
    4. Yuan, Na & Gao, Yihong, 2022. "Does green credit policy impact corporate cash holdings?," Pacific-Basin Finance Journal, Elsevier, vol. 75(C).
    5. Michal Karas & Mária Režòáková, 2021. "The role of financial constraint factors in predicting SME default," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 16(4), pages 859-883, December.
    6. Le, Anh-Tuan & Doan, Anh-Tuan, 2020. "Corruption and financial fragility of small and medium enterprises: International evidence," Journal of Multinational Financial Management, Elsevier, vol. 57.
    7. Nicolae Stef, 2021. "Institutions and corporate financial distress in Central and Eastern Europe," European Journal of Law and Economics, Springer, vol. 52(1), pages 57-87, August.
    8. Xinjun Lyu & Jinlan Ni & Jia Yuan, 2022. "Market segmentation and firm survival," Growth and Change, Wiley Blackwell, vol. 53(3), pages 1243-1266, September.
    9. Muhammad Ansar Majeed & Tanveer Ahsan & Ammar Ali Gull, 2024. "Does corruption sand the wheels of sustainable development? Evidence through green innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4626-4651, July.

    More about this item

    Keywords

    Corruption; Political favoritism; Survival; Private firms; Business discrimination;
    All these keywords.

    JEL classification:

    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:57:y:2019:i:c:s1043951x19301002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.