Defending the shell: differential effects of delisting pressure on R&D intensity and bribery expenditure

In the context of the unique Chinese delisting system and drawing on institutional theory, this paper studies the impacts of delisting pressure on corporate risk-taking activities. We find that firms under delisting pressure are less likely to engage in aspirational risk taking, such as Research and development (R&D), and more likely to exhibit deviant risk–taking behavior, such as bribery. Developing our framework and hypotheses in line with contingency theory, we find that industry competition and economic policy uncertainty strengthen the negative relationship between delisting pressure and corporate R&D expenditure. Political transparency, in contrast, weakens the positive impact of delisting pressure on corporate bribery expenditure. Additional analyses reveal that SOEs tend to reduce their R&D intensity, whereas non-SOEs tend to increase their bribery expenditure when they are under delisting pressure. This paper concludes with a discussion of the limitations for this study and suggestions for future research.