The Effects Of Corruption On The Firms' Behaviors:Evidence Of Transitional China

China has stepped into the transitional period since the implement of Opening Policy, which leads to a sharp and notable economic growth of thirty years. Nevertheless, corruption is alone with this procession and makes people confuse that whether the corruption is good or bad for the economy development. Why the economy growth runs parallel with the high corruption and what role of the corruption in the economy system-sand money or greasing money? Exist works don't offer a satisfied answer. However, it is noteworthy that these jobs are merely exploring the direct correlation between the corruption and firms or regional economic performance, which ignores the mechanism of the impact of corruption on the performance. At the same time, these researches also see the corruption as a whole and failure to catalog it from different perspectives, which maybe make it too assertive to conclude the function of corruption. Therefore, we turn the relationship of corruption and the static performance to the relationship of corruption and firms strategic behaviors. This will deepen our understanding of the mechanism and path of the impact of corruption on the economic performance. The thesis is arranged as follows.We proposed the theoretical and realistic groundback of this thesis in the first chapter, and illustrated our research question, workframe and maining contributions.In the second chapter, we introduced some related theories, and made a review from the definition, antecedents, concequences and measurement of corruption. In the Chapter 3, we analysed the institutional background of transitional China fistly, and investigated the corporate corruption behaviors through the business environment survey date carried out by World Bank in 2002,2003,2004 and 2012, and the investigation of transparency in corporate reporting carried out by Transparency International in 2012.In the Chapter 4 and Chapter 5, we will explore the relationship between corruption and the firms' strategic behaviors through two empirical projects from the perspective of firms' rent-seeking and regional corruption respectively in control of top managers, firm itself, industry and regional characterizes.The firs project probes into the relationship of the rent-seeking behaviors and firms' R&D investment, export and compensation design within firms through the data from the word bank enterprise survey of China. This carried out in 2004 in 12400 firms located at 120 cities of 30 provinces of China. The results show:(1) the rent-seeking and corruption behaviors of firms significantly improve the investment of R&D; (2) the rent-seeking and corruption behaviors of firms are positive with the probability of export activities. However, this mechanism works only in domestic private enterprises. As the corruption is always alone with the low total factor productivity, which will explain the export-productivity paradox in some Chinese firms partly. In addition, we also get a negative relationship between the corruption and export intensity; (3) the more the firms spend in the corruption behaviors, the more the top manager get when the firms' performance added, and the larger the salary gaps among the top managers, middle managers and employees. Similarly, we find the allocation effects of corruption only exist in non-state-own firms.The second one explore the impact of regional corruption on the firms'innovation and export strategies through constructing the corruption level of each province except Tibet from 2004 to 2006 and combining with Chinese Industrial Enterprise Database from 2005 to 2007.The empirical study shows:(1) overall speaking, the severer the regional corruption, the less the innovative intention and intensity of firms; (2) the relationship above are opposite in the foreign-owned firms; (3) the regional corruption is negative with the inclination and intensity of firms'export. This indicates that the institutional environment is critical to the export activities of Chinese firms.Based on the above conclusion, we obtained the insight of this research, and proposed relative policy suggestions in Chapter 6. At last, Chapter 7 is the conclusion, research limitations and future direction.This research illustrates that the corruption maybe play the both role of "sand money" and "greasing money". Generally speaking, corruption exerts a negative impact on the firms'behaviors. For example, firms'corruptions enlarge the salary gap, which will inhibit the productive enthusiasm of employees, lead to social injustice. At the same time, firms'corruptions dampen their export intensity, which lower their international competitiveness. Furthermore, the regional corruption also exerts a negative impact on the firms'innovation and export activities. However, we still find that the corruption behaviors of firms promote their investment of R&D and help them abroad and compete in the international market. This offers a reasonable explanation that why higher corruption and high economic growth can run parallel, and it also deepens our understanding of the impact of corruption on the economic growth.This thesis shows an urgent realistic meaning of inhabiting the firms'corruption, promoting the firms'productivity and constructing an innovation oriented country to ensure a healthy development of Chinese economy and avoid China into the "middle-income trap". Therefore, Chinese government should further the political and economic system reform and promote the process of marketization. Furthermore, this paper also offers some managerial implication for the anti-corruption campaign leading by the Xi Jing-ping government.