Abstract
ABSTRACT 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.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
