Punitive Effect Of Capital Market On Corporate Corruption Events

As a long-term social phenomenon,corruption not only threatens the healthy development of enterprises,but also hinders the reasonable allocation of resources and fair competition in the market.Therefore,Chinese government has repeatedly deployed anti-corruption work in government reports,emphasizing the importance of building a clean government and fighting corruption to rectify the political ecology and business environment.At the same time,an efficient capital market would encourage or punish different types of events by the rise and fall of stock returns,thus exerting the regulatory function and clearing up the market order.So we will discuss the punishment effect of corporate corruption in the capital market,and provide ideas for the internal management and control of companies and the construction of capital market under the background of anti-corruption and clean government.This paper theoretically analyzes the punishment effect of the capital market,taking a series of corruption incidents of Kweichow Moutai as the research object.In order to overcome the problems of computation difficulty or subjectivity in dealing with the statistical test of excess returns or excess trading volume by the event study method,this paper adopt the event series regression model to carry out empirical test on the continuous corruption events occurring in a company.The research finds that:the corruption event of Kweichow Moutai makes its stock returns and trading volumes drop significantly in the short term,which indicates that the capital market has played a punitive effect on the corruption event of Kweichow Moutai.Further empirical tests on the industrial and regional spillover effects of such punishment find that the corruption incidents of Kweichow Moutai reduced the overall stock returns and trading volumes of the brewing industry,but other listed companies in Guizhou Province have not been significantly affected.That is to say,the punitive effect of the capital market extends to the same industry enterprises,but does not affect other companies listed in Guizhou Province.The research results show that,as a micro individual in the capital market,the corruption of the company will not only make itself punished by the capital market,but also affect other groups in the capital market,triggering a series of chain reactions.Therefore,enterprises need to strengthen the construction of clean government and senior management team,and improve the corporate governance structure.At the same time,from the perspective of capital market control,we should strengthen system construction and supervision,and conduct quality education for investors in order to create a fair capital market and business environment and realize the goal of anti-corruption.The research conclusion of this paper also provides empirical evidence for relevant companies to prevent the negative impact of such events,contribute to the construction and stable development of the capital market,and provide suggestions for the formulation of relevant policies and regulatory measures.