Powerful political corporate appointments and firm bribery channels

Purpose - The authors examine the influence of powerful political corporate appointments on the usage of firm bribery channels. Party Secretaries within Chinese state-owned enterprises (SOEs) may simultaneously hold top management positions, thereby endowing powerful firm-level decision rights on those appointees, hereafter referred to as powerful dual role Party Secretaries. Design/methodology/approach - This study employs panel data analysis with industry and year fixed effects. The authors use a sample of 1,143 Chinese SOEs listed on the Shanghai and Shenzhen Stock Exchanges from 2004 to 2015. Findings - The authors find that powerful dual role Party Secretaries are associated with greater bribery channel usage. Following the ongoing anticorruption campaign, SOEs with the powerful appointments significantly reduce their usage of both transparent (entertainment and travel costs) and opaque bribery (abnormal management expenses) channels. However, in general, Chinese SOEs respond to the anticorruption shock by switching from the more transparent to the opaquer bribery channel. Originality/value - The authors contribute to the ongoing debate of politicians on corporate boards by examining the relatively unexplored area of government appointed top management and their influence on bribery at the firm level.