The Research On The Influence Of Bribery To The Firm Value

Listed companies' bribery becomes a more frequent and serious part of a corruption case,hinders the effective operation of the market mechanism as well.According to the rent-seeking theory,before being disclosed by the media,bribery benefits the companies by shortening the approval process,acquiring market access and reducing excessive bureaucratic interference,but the degree of ben efit in stated-owned companies may be different from that in non-state-owned companies.After being disclosed by the media,bribery means negative information about corporate governance,internal control and compliance with the law to investors.Bribery may damage the companies' business and regulatory relations seriously,undermine the morale of employees and pose a threat to the competitiveness of the companies.Therefore,it may cause a decline in companies' stock price,but due to institutional factors,the value of the non-state-owned enterprises may be damaged more serious.This paper analyzes the correlation between bribery and firm value from benefit mechanism and derogation mechanism.Collecting data manually and selecting 73 listed companies whose bribery were filed in Shanghai and Shenzhen Stock Exchange from 2001 to 2015.Taking bribery as an explanatory variable,firm value as sales growth and Tobin's Q respectively before and after bribery is disclosed by the media,and enterprises' ownership as a grouping variable,controlling the year of the company survival,leverage,cash flow and the percentage of independent directors,we empirically test the influence of bribery to the firm value by using the method of multivariate linear regression.We find that bribery and companies' sales growth are positively correlated before being disclosed by the media,and the relationship is more significant in state-owned enterprises.Bribery will cause a decline in firm value after being disclosed by the media,and the fall in the firm value of the non-state-owned enterprises is bigger.The possible explanation of the findings is that the absence of owners and the ineffective supervision.Due to the state-owned background and political connections,the capital market punishes state-owned enterprise less after its bribery being perceived.The results of this study will help stakeholders to fully understand the economic consequences,help to improve anti-corruption regulatory mechanisms as well.