Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

3-2026

Abstract

My dissertation investigates the impact of China’s anti-corruption campaign on the pricing of traditional Chinese paintings, leveraging a unique dataset of repeat sales transactions. Since the 1990s, China’s art market has experienced explosive growth, becoming the world’s largest by 2011. However, this market is characterized by extreme opacity, facilitating elegant bribery (“ya hui” in Chinese), where artworks serve as vehicles for implicit corruption through inflated auctions or disguised gifts to officials. The launch of the "Eight-point Regulation" in December 2012 marked a significant intensification of anti-corruption efforts, raising the critical question of how such political shocks affect asset pricing in non-transparent artwork markets.

Addressing a gap in existing literature, which has explored art pricing and anti-corruption separately but not their intersection, this study posits that intensified anti-corruption enforcement reduces art prices by eliminating political power premiums associated with elegant bribery. Two hypotheses are tested in my paper: (1) provinces with stronger anti-corruption measures experience larger declines in painting prices post-2012; and (2) this effect is more pronounced for artworks susceptible to price manipulation (e.g., contemporary pieces, those sold by small auction houses, or classic works by renowned artists).

Employing a Difference-in-Differences (DID) framework, the analysis utilizes comprehensive auction data from Artron.net and manually collected provincial data on duty-related crime cases to measure anti-corruption intensity. The sample covers 10,415 transactions from 2008 to 2014. The benchmark regressions suggest that after 2012, provinces with higher anti-corruption intensity see large drop in art prices compared to less stringent regions. Parallel trend assumptions are validated, and results remain robust using continuous measures of enforcement intensity. Heterogeneity analyses further corroborate the mechanisms. Chinese painting price declines are significantly larger for contemporary paintings (vs. modern ones), works sold by small auction houses (vs. large international ones), classic pieces by famous artists (vs. non-classic works), and in provinces with high government-market connectivity. These findings suggest that anti-corruption policies effectively purge non-market valuations driven by corruption, particularly in segments prone to opacity and speculation.

In conclusion, this study demonstrates that political shocks can reprice assets in opaque markets, highlighting the necessity of robust regulatory frameworks to ensure market integrity. It provides novel empirical evidence on the economic consequences of anti-corruption campaigns, extending understanding beyond traditional sectors like real estate or equities to the unique realm of cultural assets.

Keywords

Art pricing, Anti-corruption campaigns, Difference-in-Differences, Political shocks

Degree Awarded

Doctor of Bus Admin (CKGSB)

Discipline

Finance | Political Economy

Supervisor(s)

FU, Fangjian

First Page

1

Last Page

107

Publisher

Singapore Management University

City or Country

Singapore

Copyright Owner and License

Author

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