ABSTRACT
This article investigates the effects of an anti-corruption campaign on firm value by testing market reactions to the investigation of top local officials during the recent anti-corruption campaign in China. We find that the anti-corruption events are more likely to be bad news for the market values of local state-owned enterprises (SOEs) but good news for the market values of non-SOEs less dependent on political connections. Besides, anti-corruption events are also more likely to be bad news for firms in regulated industries or low-marketization regions but good news for firms in nonregulated industries or high-marketization regions.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 The more detailed information on the Eight-point Regulation can be seen on the China daily website (http://cpcchina.chinadaily.com.cn/2012-12/05/content_15992256.htm).