How corruption affects entrepreneurial exit: Micro-evidence from Chinese entrepreneurs

Abstract

The relationship between public corruption and entrepreneurship has gained increasing attention among researchers, yet we know little about how corruption affects entrepreneurial exit, especially at the micro level. Drawing on institutional theory and conservation of resources (COR) theory, we propose a moderated-mediation model that explores mechanisms and conditions through which corruption influences entrepreneurial exit. We conducted a longitudinal survey and a scenario-based experiment. Our empirical results demonstrate that corruption has a positive effect on entrepreneurial exit intention. Consistent with our hypothesis, this relationship is mediated by entrepreneurial stress. The moderated path analysis further indicates that political skills weaken the effect of corruption on entrepreneurial stress and entrepreneurial exit intention. Our findings extend the scope of public management research and provide some practical suggestions for government and entrepreneurs.