Official Corruption and Wealth-Hiding of Companies
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| Title | Official Corruption and Wealth-Hiding of Companies
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| Author | Liu Chun,Li Shanmin and Sun Liang |
| Organization | International Business School, Sun Yat-sen University;School of Business, Sun Yat-sen University |
| Email | hawkchun@163.com；tefo@163.com；mnslsm@mail.sysu.edu.cn |
| Key Words | Official Corruption, Wealth-Hiding of Companies, Protection Money |
| Abstract | Relaxing the hypothesis that all departments of government is a concerted action in extant literature and extending behavior selection model of enterprise under corruption condition, we theoretically deduct autonomy behavior choice of company and influencing factors when being faced with corrupt officials’ extortion and empirically test the theoretical proposition of the model by using the data of A-share listed companies over period 2002-2011. We show that corruption can cause wealth-hiding behavior of company, and the more serious corruption is in the region, the higher degree wealth-hiding behavior of company is. We find that the greater the probability of extortion by corrupt officials and the smaller rent-seeking demand of company itself, wealth-hiding behavior caused by corruption is more obvious. Further study also indicates wealth-hiding of company really help reduce protection money by corrupt officials’ extortion and this effect especially obvious in high corruption area. Owning to corruption seriously distorting micro enterprise behaviors, our findings implicate that only determined striking corruption can bring enterprise's decision-making behavior based on market mechanism back to the optimal state. |
| Serial Number | WP821 |
| Time | 2015-02-13 |
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