Writer: Updated: 21 October 2019 Times Read:

Abstract:

    Exploiting China’s anti-corruption campaign as an exogenous shock to corruption, we show that following a decrease in the effectiveness of corruption, the performance of firms operating in ex ante more corrupt environments improves. Small firms benefit more. We identify the channels through which corruption hampers firm performance. Following the anti-corruption campaign, the allocation of capital and labor becomes more efficient. Firms operating in ex ante more corrupt environments experience larger productivity gains, easier access to debt financing, and higher growth of sales than other firms. Overall, our results suggest that corruption creates negative externalities.

About the reporter:

    Professor Liao Guanmin of the Department of Accounting, School of Business at the Renmin University of China received Ph.D. in Accounting from the Renmin University of China in 2007, and worked at the Accounting School at the Central University of Finance and Economics from 2007 to 2018. His main research interests are corporate governance and the usefulness of accounting information in incentive contracts. His academic achievements have been published in top academic journals at home and abroad, such as the Journal of Finance, Journal of Accounting and Economics, Journal of Money, Credit, and Banking, and Accounting Research. He has received academic awards and honors such as the Sun Yefang Financial Innovation Award, National Accounting Leaders (Reserve) Talent of the Ministry of Finance, “Young Talent Program” of the Beijing Higher Education Institution, Excellent Doctoral Thesis of Beijing, Excellent Doctoral Thesis of the Renmin University of China, Excellent Paper of China Finance Annual Conference, etc. He has presided over many National Natural Science Foundation of China and the Humanities and Social Science Foundation of the Ministry of Education.