NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Xiaofeng Zhao

Chinese University of Hong Kong

E-Mail: xiaofeng@baf.cuhk.edu.hk
Institutional Affiliation: Chinese University of Hong Kong

NBER Working Papers and Publications

February 2016Anti-Corruption Reforms and Shareholder Valuations: Event Study Evidence from China
with Chen Lin, Randall Morck, Bernard Yeung: w22001
Consistent with reduced expected corruption adding value overall, Chinese shares rise sharply on the December 4th 2012 launch of major anti-corruption reforms, which started by curtailing extravagant spending by or for Party cadres. SOEs gain broadly, consistent with the reform cutting their top managers’ (all Party cadres) spending on private benefits. NonSOEs gain in more liberalized provinces, consistent with reduced expected bribes to officials (also Party cadres) for getting business done. NonSOEs lose in provinces where market institutions remain weak, consistent with bribes for “greasing bureaucratic gears” still being a key resource allocation mechanism there. Firm level regressions reveal more productive nonSOEs in more growth potential and external finance-dependent industries ga...
 
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