Publication Type
Journal Article
Version
acceptedVersion
Publication Date
10-2021
Abstract
We examine the relation between local political corruption and firms' cross-province M&As using provincial-level data on corruption in China. The results show that firms in more corrupt regions are less likely to engage in cross-province M&As. Further analyses reveal that the effects of local corruption on the probability of cross-province M&As are stronger when corrupt officers have greater impeding benefits or lower impeding costs. Meanwhile, Both ex-ante intervention and ex post punishment are important channels through which corrupt officers hinder firms' cross province M&As. Moreover, informal institutions, such as social capital and informal networks can help to alleviate the negative impact of political corruption on firms' cross-province M&As. Our findings show that in the context of highly government intervention, cross-province M&As not only cannot be an effective channel to shield from expropriation, but are themselves highly distorted and lead to significant economic efficiency losses.
Keywords
Political corruption, Anti-corruption campaign, M&As, China
Discipline
Accounting | Asian Studies | Business Law, Public Responsibility, and Ethics | Corporate Finance
Publication
China Economic Review
Volume
69
First Page
1
Last Page
17
ISSN
1043-951X
Identifier
10.1016/j.chieco.2021.101677
Publisher
Elsevier
Citation
LIU, Chun; CHEN, Yang; LI, Shanmin; SUN, Liang; and YANG, Mengjie.
Local political corruption and M&As. (2021). China Economic Review. 69, 1-17.
Available at: https://ink.library.smu.edu.sg/soa_research/1960
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.chieco.2021.101677
Included in
Accounting Commons, Asian Studies Commons, Business Law, Public Responsibility, and Ethics Commons, Corporate Finance Commons
