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Is the Chinese Anticorruption Campaign Authentic? Evidence from Corporate Investigations

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  • John M. Griffin

    (McCombs School of Business, University of Texas, Austin, Texas 78712)

  • Clark Liu

    (People's Bank of China School of Finance (PBCSF), Tsinghua University, Beijing 100083, China)

  • Tao Shu

    (School of Management and Economics, Shenzhen Finance Institute, Chinese University of Hong Kong, Shenzhen 518172, China)

Abstract

This paper examines whether the massive Chinese anticorruption campaign ensnares corrupt firms, contains a political component, and reduces corporate corruption. Consistent with the campaign’s stated objectives, investigated executives are more likely to come from Chinese firms with characteristics commonly associated with measures of poor governance, self-dealing, and inefficiencies. However, affiliations with prominent investigated political leaders increase investigation likelihood, while university affiliations with current central leadership decrease investigation likelihood, possibly indicating political partiality. Except for reported entertainment expenditures and chief executive officer pay, there has been little evidence of a substantial overall decrease in measures of potential corporate corruption.

Suggested Citation

  • John M. Griffin & Clark Liu & Tao Shu, 2022. "Is the Chinese Anticorruption Campaign Authentic? Evidence from Corporate Investigations," Management Science, INFORMS, vol. 68(10), pages 7248-7273, October.
    • Handle: RePEc:inm:ormnsc:v:68:y:2022:i:10:p:7248-7273
    DOI: 10.1287/mnsc.2021.4181
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