The Economic Impact of Anti-corruption Campaigns: New Materials for New Research Agendas in China

Corruption plagues both developed and developing countries. It is a serious obstacle to China's development that is too perilous to ignore. However, conducting research on corruption, which is characterised as being the most secretive type of behaviour, is particularly difficult. Applying the vector autoregressive model (VAR) to consecutive 36-month data, the authors analyse empirically the corruption status quo and its impact in China. The authors discover short-term negative impacts of the current anti-corruption campaign in China on the economic growth of its state-owned industries, while any positive effects, e.g. improved quality of economic growth, cannot be demonstrated. The objective data used reduce significantly the confusion surrounding traditional (anti-)corruption studies, which have relied heavily on survey data or subjective evaluation.