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Who gets caught for corruption when corruption is pervasive? Evidence from China’s anti-bribery blacklist

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  • Liming Zhou
  • Zhangfeng Jin
  • Zheng Wang

Abstract

This article empirically investigates why in a corruption-pervasive country only a minority of the firms get caught for bribery while the majority get away with it. By matching manufacturing firms to a blacklist of bribers in the healthcare sector of a province in China, we show that the government-led blacklisting is selective: while economically more visible firms are slightly more likely to be blacklisted, state-controlled firms are the most protected compared to their private and foreign competitors. Our finding points to the fact that a government can use regulations to impose its preferences when the rule of law is weak and the rule of government is strong.

Suggested Citation

  • Liming Zhou & Zhangfeng Jin & Zheng Wang, 2017. "Who gets caught for corruption when corruption is pervasive? Evidence from China’s anti-bribery blacklist," Applied Economics Letters, Taylor & Francis Journals, vol. 24(4), pages 258-263, February.
    • Handle: RePEc:taf:apeclt:v:24:y:2017:i:4:p:258-263
    DOI: 10.1080/13504851.2016.1181826
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    References listed on IDEAS

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    1. Jakob Svensson, 2003. "Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 207-230.
    2. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    3. Chen, Ye & Li, Hongbin & Zhou, Li-An, 2005. "Relative performance evaluation and the turnover of provincial leaders in China," Economics Letters, Elsevier, vol. 88(3), pages 421-425, September.
    4. Jin, Hehui & Qian, Yingyi & Weingast, Barry R., 2005. "Regional decentralization and fiscal incentives: Federalism, Chinese style," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1719-1742, September.
    5. Sequeira, Sandra & Djankov, Simeon, 2014. "Corruption and firm behavior: Evidence from African ports," Journal of International Economics, Elsevier, vol. 94(2), pages 277-294.
    6. Michael Song, 2014. "Crony Capitalism with Chinese Characteristics," 2014 Meeting Papers 1145, Society for Economic Dynamics.
    7. Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
    8. John Rand & Finn Tarp, 2012. "Firm-Level Corruption in Vietnam," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 571-595.
    9. Cai, Hongbin & Treisman, Daniel, 2004. "State corroding federalism," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 819-843, March.
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    Cited by:

    1. Szerman, Christiane, 2023. "The employee costs of corporate debarment in public procurement," LSE Research Online Documents on Economics 125608, London School of Economics and Political Science, LSE Library.

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