Abstract:
This paper explores the effects of anti-corruption on fixed asset investment and mechanism. Specifically, this paper studies how anti-corruption affects the scale, structure and efficiency of investment exploiting the shocks of senior official sacked. Using the panel data of Chinese provinces from 1998 to 2013 and the Annual Survey of Industrial Firms(ASIF) from 1998 to 2007, we find that the shocks of senior official sacked suppress growth of investment, and mainly suppress SOEs' investment which is subjected to greater regulation, but not the other types of investment. We confirm our primary finding in the micro level using industrial enterprises data, and find that the shocks of senior official sacked improve investment of high-efficient enterprises. It's helpful to promote investment efficiency. Our findings are meaningful to understand the investment behavior of SOE and the construction of a clean government. Enhancing the cleanliness of government organizations, and vigorously promoting the decentralization of government power, is the effective measures to promote investment.
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