2024/08/06 by Bing Zhang, Hai Zhong · 4 citations
Business, Management and Accounting · Computer Science · Social Sciences · #China #Corporate Finance and Governance #Corruption and Economic Development #Economic Growth and Development #Economics #Language change #Macroeconomics #Political science
paper · doi:10.1080/00036846.2024.2386856
published in Applied Economics 57(43), 6789-6803 (Taylor & Francis)
openalex publication_date 2024/08/06 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/25
This article examines the effects of anti-corruption efforts on firm innovation in China. Based on the number of invention patent applications filed by firms, we find that firms located in areas with intense anti-corruption efforts are more innovative. We control for a broad set of firm and province characteristics, including industry-year fixed effects, and demonstrate the robustness of the results using an instrumental variable analysis, alternative proxies for anti-corruption intensity and innovation and a fixed-effect Poisson regression model. A heterogeneity analysis shows that the innovation-enhancing effects of anti-corruption efforts on the likelihood to apply for invention patents is greater for young companies and those without political connections, while no significant difference when conditional on having invention patent applications. Moreover, anti-corruption efforts have no significantly different effects between state-owned and private enterprises. Further analysis shows that anti-corruption efforts significantly increase investments in research and development and innovation efficiency, leading to enhanced productivity and firm growth in the following years.