Abstract:
Using China's 18th Party Congress as an exogenous policy impact event, we study the effects of anti-corruption on firm behaviors. We find that after China's 18th Party Congress, compared with listed firms in China's cities with lower corruption incidence, those firms in cities with higher corruption incidence have a significantly increased executive pay-performance and meanwhile the value of their cash holdings increases significantly. We also find that listed firms in China's cities with higher corruption incidence see their financial statement regularities make better and decrease earnings management after China's 18th Party Congress. The further analysis shows that accounting quality improvement effects of the anti-corruption movement mainly occur in non-state firms, but improvement in executive pay-performance sensitivity mainly comes from state owned firms. Our study provides evidence for the negative effect of corruption on corporate governance, executive incentive and shareholder value.
王茂斌, 孔东民. 反腐败与中国公司治理优化:一个准自然实验[J]. 金融研究, 2016, 434(8): 159-174.
WANG Maobin, KONG Dongmin. Anti-corruption and Chinese Corporate Governance: A Quasi-Natural Experiment. Journal of Financial Research, 2016, 434(8): 159-174.
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