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Anti-corruption campaign and capacity utilization of state-owned enterprises: Evidence from China's central committee inspection.
- Source :
- Economic Analysis & Policy; Dec2023, Vol. 80, p319-346, 28p
- Publication Year :
- 2023
-
Abstract
- Firms cannot utilize capacity probably rooted in factors beyond technical constraints, like corruption. This paper systematically investigates the causal effect of the anti-corruption campaign (ACUC) on corporate capacity utilization. Based on the financial data of China's state-owned listed companies from 2007 to 2018, we calculate the firm-level capacity utilization rate and employ central committee inspection (CCI) as a quasi-natural experiment to come to the following findings. Firstly, we find that the anti-corruption campaign significantly increases the capacity utilization of SOEs by 10.4 percentage points, which remains robust across a set of robustness checks. Secondly, anti-corruption campaign affects corporate capacity utilization by diminishing agency cost, improving investment efficiency and promoting technological innovation. Thirdly, the positive policy effects are more pronounced for firms with a lower level of capacity utilization and weaker motivation for political promotion. Finally, we find the impact spillover through the supply chain, but only for suppliers to customers. And the multiple-treatment effects are insignificant. Our findings highlight the evidence of having an anti-corruption campaign for enhancing the operational efficiency and performance of SOEs and provide new views for emerging markets on how to supervise SOEs. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 03135926
- Volume :
- 80
- Database :
- Supplemental Index
- Journal :
- Economic Analysis & Policy
- Publication Type :
- Academic Journal
- Accession number :
- 174301305
- Full Text :
- https://doi.org/10.1016/j.eap.2023.08.010