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Does anti-corruption campaign promote corporate R&D investment? Evidence from China

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  • Gan, Weiyu
  • Xu, Xixiong

Abstract

We investigate the impact of China's anti-corruption campaign on corporate innovation. Our empirical results corroborate a significant positive association between anti-corruption intensity and firm's R&D expenditures, which indicate that firms headquartered in provinces with stronger anti-corruption efforts, are less likely to choose relation-orientated strategy, and thus invest more in R&D activities. In addition, compared with SOEs, the positive effect of anti-corruption on R&D spending is more pronounced for Non-SOEs. This paper provides insights for understanding the impact of corrupt environment on firm performance and its underlying path.

Suggested Citation

  • Gan, Weiyu & Xu, Xixiong, 2019. "Does anti-corruption campaign promote corporate R&D investment? Evidence from China," Finance Research Letters, Elsevier, vol. 30(C), pages 292-296.
    • Handle: RePEc:eee:finlet:v:30:y:2019:i:c:p:292-296
    DOI: 10.1016/j.frl.2018.10.012
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    References listed on IDEAS

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    More about this item

    Keywords

    Anti-corruption; Corporate innovation; Relation-orientated strategy; R&D investment;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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