Has Anti-corruption Efforts lowered Enterprises Innovation Efficiency? -An Empirical Analysis from China

TL;DR

This paper empirically examines how anti-corruption efforts influence enterprise innovation efficiency in China, revealing that effects vary by corruption level, enterprise ownership, and regional factors, with overall positive impacts at high corruption levels.

Contribution

It provides a nuanced empirical analysis of the differential impacts of anti-corruption measures on enterprise innovation efficiency based on corruption levels and ownership types in China.

Findings

Anti-corruption positively correlates with innovation efficiency at high corruption levels.

At low corruption levels, anti-corruption negatively impacts innovation efficiency.

Effects differ between state-owned and nonstate-owned enterprises.

Abstract

This study adopts the fixed effects panel model and provincial panel data on anticorruption and the innovation efficiency of high-level technology and new technology enterprises in China from 2005 to 2014, to estimate the effects of the anticorruption movement on the innovation efficiency of enterprises at different corruption levels. The empirical results show that anticorruption is positively correlated with the innovation efficiency of enterprises; however, the correlation is differentiated according to different corruption levels and business natures. At a high level of corruption, anticorruption has positive impacts on enterprises' innovation; at a low level of corruption, it negatively affects innovation efficiency. However, anticorruption has negative effects on the innovation efficiency of state-owned enterprises at both high and low corruption levels; for nonstate-owned enterprises, its effects are positive at a high corruption level and negative at a low corruption level. The effects remain the same across different regions.