| ID | 182785 |
| Title Proper | Local political corruption and M&As |
| Language | ENG |
| Author | Liu, Chun |
| Summary / Abstract (Note) | 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. |
| `In' analytical Note | China Economic Review Vol. 69, Oct 2021: p.101677 |
| Journal Source | China Economic Review 2021-09 69, 69 |
| Key Words | Political Corruption ; Anti-Corruption Campaign ; M&As |