Abstract
This study investigates the role of state ownership and corruption expenditure in the relationship between economic policy uncertainty (EPU) and corporate risk-taking. The finding shows that EPU is significantly positively correlated with corporate risk-taking in China. The state ownership affects the link between EPU and corporate risk-taking, and SOEs are more willing to avoid risks in response to the increases of EPU. Corruption expenditure positively affects the relationship between EPU and corporate risk-taking. Compared with SOEs, non-SOEs have more incentive to respond to an increase of EPU through corruption expenditure. Moreover, China's anti-corruption campaign strongly affects the above effects. Our results are robust to alternative variable measures and endogeneity tests.
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