IDEAS home Printed from https://ideas.repec.org/a/eee/finana/v97y2025ics1057521924007270.html
   My bibliography  Save this article

Transaction-based government-business relationship via government customer

Author

Listed:
  • Song, Peixin
  • Teng, Fei
  • Xin, Yu
  • Xu, Liping

Abstract

Transaction-based government-business relationship (GBR) can be established when the government serves as a company's customer. This study investigates the consequences and mechanisms of this type of GBR. We find that companies with government customers receive more subsidies, due to both signalling effect and rent-seeking effect. As China's anti-corruption campaign tries to disconnect relation-based GBR and eliminate rent-seeking, transaction-based GBR survives. In the post anti-corruption campaign period, the rent-seeking effect of the transaction-based GBR weakens, but the signalling effect remains, and the government subsidy efficiency improves. This study sheds lights on the economics of transaction-based GBR which is largely ignored in the existing literature and reveals the effects of the interactions of anti-corruption and business transactions.

Suggested Citation

  • Song, Peixin & Teng, Fei & Xin, Yu & Xu, Liping, 2025. "Transaction-based government-business relationship via government customer," International Review of Financial Analysis, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:finana:v:97:y:2025:i:c:s1057521924007270
    DOI: 10.1016/j.irfa.2024.103795
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1057521924007270
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irfa.2024.103795?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.

    More about this item

    Keywords

    Government-business relationship; Government customers; Government subsidies; Anti-corruption campaign;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    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:finana:v:97:y:2025:i:c:s1057521924007270. 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/inca/620166 .

    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.