TY - JOUR
T1 - Local political corruption and M&As
AU - Liu, Chun
AU - Chen, Yang
AU - Li, Shanmin
AU - Sun, Liang
AU - Yang, Mengjie
N1 - Funding Information:
We are grateful for the valuable comments and suggestions from Shangkun Liang, Yuetang Wang, Xixiong Xu, Dengjin Zheng, the six anonymous procurators in China, and the seminar participants at Singapore Management University, Xiamen University, Sun Yat-sen University . But all errors are our own. Shanmin Li, Chun Liu, and Liang Sun acknowledge financial support from the National Natural Science Foundation of China (No. 71772182 , No. 71972186 and No. 70172022 .).
Funding Information:
We are grateful for the valuable comments and suggestions from Shangkun Liang, Yuetang Wang, Xixiong Xu, Dengjin Zheng, the six anonymous procurators in China, and the seminar participants at Singapore Management University, Xiamen University, Sun Yat-sen University. But all errors are our own. Shanmin Li, Chun Liu, and Liang Sun acknowledge financial support from the National Natural Science Foundation of China (No. 71772182, No. 71972186 and No. 70172022.).
Publisher Copyright:
© 2021 Elsevier Inc.
PY - 2021/10
Y1 - 2021/10
N2 - 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.
AB - 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.
KW - Anti-corruption campaign
KW - M&As
KW - Political corruption
UR - http://www.scopus.com/inward/record.url?scp=85112158546&partnerID=8YFLogxK
U2 - 10.1016/j.chieco.2021.101677
DO - 10.1016/j.chieco.2021.101677
M3 - Article
AN - SCOPUS:85112158546
SN - 1043-951X
VL - 69
JO - China Economic Review
JF - China Economic Review
M1 - 101677
ER -
