The effect of anti-corruption campaign on shareholder value in a weak institutional environment: Evidence from China

We examine the impact of Chinese President Xi Jinping’s anti-corruption campaign on shareholder value of publicly listed Chinese firms. We find that the anticorruption campaign reduces the profitability of the firms that sell luxury goods and services. The anti-corruption campaign helps reduce excessive perk consumption by luxury goods and services consuming SOEs but, as predicted, we find no evidence that the campaign affects excessive perk consumption by luxury goods and services consuming non-SOEs. However, we find no evidence that the campaign had a positive or negative impact on net shareholder value for luxury goods and services consuming SOEs and non-SOEs.