The Influence Of Corruption On Enterprise Investment Behavior

Corruption has always been the focus of practice and academia.In order to deal with this problem,the 18 th National Congress of the Communist Party of China put forward the action of “Combating Corruption and Upholding Integrity” and “Beat ‘Tigers' and ‘Flies' Together” in 2012.The anti-corruption in the 18 th and 19 th National Congress of the Communist Party of China,made people know the determination of the government,which would be transformed into a "serviceoriented government".The Procuratorate,as the organ to investigate and handle the official duty crimes,plays an important role in the construction of “Combating Corruption and Upholding Integrity”.In 2014,the number of people prosecuted and investigated reached 55,101,which was the maximum in the past decade.In recent years,the number of people prosecuted and investigated has gradually declined.As the same time,China's reputation has also been on the rise in recent years,according to Transparency International.The prosecutorial record data and the Corruption Perceptions Index reflect that the anti-corruption works.This paper studies the influence of regional corruption on enterprise investment,providing an empirical supplement for the government's anti-corruption.Firstly,the literature related to corruption/anti-corruption and enterprises investment behavior was sorted out.Different scholars have different views on the impact of corruption/anti-corruption on enterprise investment.Then,based on the literature review and previous research,the hypotheses were proposed.Corruption of government officials would do harm to independence decision of enterprise investment,leading to the inefficiency of investment.Therefore,the first hypothesis was put forward: corruption can stimulate enterprise to have inefficient investment.The political association can help that the enterprise is supported by the government.In order to obtain the political association,the enterprise investment cost would rise if delivering economic interests to government officials.Therefore,the second hypothesis was proposed: When corruption occurs,political association stimulates enterprise investment.Government subsidies bring a large amount of cash flow to enterprises and would become the way for the government to intervene in enterprises.Therefore,the third hypothesis was proposed: When corruption occurs,government subsidies would stimulate enterprise investment.Based on theoretical basis and hypothesis,the regression models were established with regional corruption as the core explanatory variable,and investment scale,inefficient investment and excessive investment of enterprises as the three explained variables.Then,the empirical analysis was worked out.Empirical results showed that corruption could generate inefficient investment.Political association would bring convenient resources to enterprises and stimulate their investment scale and inefficient investment.In the case of corruption,political connection played a significant role.Government subsidy is a practical benefit,which increases the cash flow of enterprises,stimulating investment and reducing the efficiency of investment.But whether government subsidy,accompanied by corruption,would play a role in the enterprise investment,was not known.Corruption would not bring benefits to enterprise investment,but encouraged them to make inefficient investment.Anti-corruption would help to reduce inefficient investment,improve the efficiency of investment and create more efficient and cleaner investment environment.