Political power, local government, and firm performance: Evidence from the current anti-corruption enforcement in China

Abstract

Employing recent research results covering anti-corruption investigation in China (e.g. Deng, 2018; Gang and Yano, 2017; Kim, Li, and Tarzia, 2018; Kong, Wang, and Wang, 2017; Li et al., 2017; Ying and Liu, 2018), I clarify that anti-corruption investigation is more successful when top officials are aimed at. Using data from BofA Merrill Lynch Global Research & CEIC, CCDI & Morgan Stanley Research, Eurasia Group, The Wall Street Journal, and Transparency International, I performed analyses and made estimates regarding China’s Central Communist Party inspections by institution and the number of officials disciplined and severely disciplined. Empirical and secondary data are used to support the claim that the competence of the government bureaucrats in anti-corruption agencies may have a considerable effect on the success of anti-corruption enforcement in China.