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The purpose of this paper is to shed light on the deleveraging impact of the anti-corruption campaign since the 18th National Congress of the Communist Party of China (CPC) on private firms with political connections, relative to those without political connections.

In this paper, taking the anti-corruption campaign employed from the end of 2012 as an exogenous shock, the authors design a quasi-experiment difference-in-difference approach to examine how the loss and failure of political connections impacts private firms’ debt financing.

The authors find that the loss and failure of political connections following the anti-corruption campaign since the 18th CPC National Congress causes the yearly new debt ratios of treatment firms with political connections to decrease, relative to those of control firms without political connections. This outcome is more pronounced for provinces with more cadres excluded in the anti-corruption campaign since the 18th CPC National Congress, which rendered politically connected firms susceptible to lose connections with central or provincial cadres. To explore the mechanism, the authors find that following the anti-corruption campaign since the 18th CPC National Congress, politically connected firms limit rent-seeking activities, whereas resource acquisition is weakened. The authors also find that the impact of the anti-corruption campaign since the 18th CPC National Congress on the debt financing of politically connected firms, relative to their counterparts, is more pronounced for groups with high levels of information asymmetry and for less explicit guarantee groups. Finally, politically connected firms are more likely to be dominated by internal funds in dealing with a loss of advantages in debt financing, compared with their counterparts without political connections.

The findings in this study suggest that the loss or failure of previous political connections following Xi’s anti-corruption campaign make politically connected firms lose the advantages in debt financing through the rent-seeking, resource acquisition, information asymmetry, implicit guarantee channels, which provide new evidence for research on the impact of the anti-corruption campaign since the 18th CPC National Congress on private firms’ financing behaviors via the loss or failure of existing political connections.

The findings in the study will have some inspiration for policy makers and entrepreneur.

This study provides new evidence on the different impacts of Xi’s anti-corruption campaign on private firm’s debt financing between politically connected and unconnected firms.

This study aims to take advantage of the unprecedented anti-corruption campaign launched in China in December 2012 and examine the effect of improved public governance on tunneling.

This study uses a sample of Shanghai and Shenzhen Stock Exchange listed companies from 2010 to 2014 and conduct regression analyses to investigate the effect of improved public governance attributed to the anti-corruption campaign on tunneling.

This study finds that the level of tunneling decreased significantly after the anti-corruption campaign, suggesting that increased public governance effectively curbs tunneling. Cross-sectional results show that this mitigating effect is more pronounced for non-SOE firms, especially non-SOE firms with political connections, firms audited by non-Big 8 auditors, firms with a large divergence between control rights and cash flow rights and firms located in areas with lower marketization.

This study highlights the importance of anti-corruption initiatives in improving public governance and in turn reducing tunneling. This study provides important implications for many other emerging economies to improve public governance.

This study contributes to the literature on the role of public governance in constraining corporate agency problems and advances the understanding of the economic consequences of China's anti-corruption campaign in the context of tunneling.

The authors study the effectiveness of the anti-corruption campaign in all of mainland China's provinces in terms of risk and volatility spillovers.

A nonlinear model describes interdependencies and determines how shocks and uncertainty spillovers from the first suspects to the rest of the country are dynamically transmitted.

The authors find that both idiosyncratic and systematic risk increase after the first investigation, suggesting that investors do react to the political shocks induced by the new policy. However, even if the scope of the inquiry expands, as the current policy is almost certain to be maintained, investors do not need to update their beliefs, stock news about their political costs does not matter and shocks cease to spread.

In this paper, the authors contribute to the literature by examining the financial effects of China's anti-corruption campaign and determining whether such a large-scale campaign affects risk. Qian and Wen (2015) and Ke et al. (2016) show that the anticorruption campaign has a negative impact on the consumption of luxury goods. Agarwal et al. (2020) provide evidence that government officials' access to credit decreases following the anti-corruption campaign. According to Zhang (2018), firms are less prone to commit fraud after the anti-corruption campaign. However, Griffin et al. (2018) find little evidence that the anti-corruption campaign reduces corporate corruption. Kim et al. (2018) assess market reaction during the investigation and discover that the anti-corruption examination has a significant positive influence on Chinese financial markets. The authors intend to fill the gap in the literature concerning the campaign's impact on risk and volatility spillovers across the country during the first stage of the campaign.

The purpose of this paper is to provide a historical review of China’s anti-corruption efforts, from the ancient period of Chinese slavery societies to the late 1970s before China launched its profound economic reform, under the current status of the harsh crusade against corruption that the Chinese new leadership initiated.

This paper is mainly based on a great deal of historical literature and empirical findings, with relevant comparative analysis on policies and regulations between various periods of China.

The phenomenon of corruption has existed in Chinese history for thousands of years, throughout Chinese slavery societies, feudal societies, republic period and the People’s Republic of China (PRC). Anti-corruption laws formed an important part of ancient Chinese legal system, and each dynasty has made continuous and commendable progress on fighting such misconduct. Innumerable initiatives have also been taken by the ruling party Chinese Communist Party (CCP) since the founding of the PRC. The PRC government created various specially designed government organizations and a series of updated regulations for preventing economic crimes. They have realized that periodic movements against corruption would no longer be helpful, and the paramount issue nowadays is indeed how bold the leaders are in striking out those unhealthy tendencies.

This paper fills in the blanks in the Western world with a comprehensive description of, and comments on, the historical efforts on China’s corruption and economic crime prevention. It also, in various ways, provides meaningful information that links to China’s current furious war against corruption.

Based on the authors’ study, the purpose of this paper is to establish a foundation for assessing and deciding the most feasible corruption prevention activities with significant impact in reducing corruption in the Indonesian public sector. To accomplish this objective, this paper applies multiple theoretical perspectives simultaneously to better understand the behavioral aspects of corruption prevention strategy in Indonesia.

This paper is part of the authors’ study to assess the corruption problem in the Indonesian public sector in the past decade primarily through examination of major corruption cases to highlight various behavioral issues that became the root causes of rampaging corruption in the country. This paper also discusses how such issues undermine the effectiveness of the existing corruption prevention strategy as well as how to properly address them.

The authors establish that there are numerous overlooked behavioral issues that have rendered existing corruption prevention measures in the Indonesian public sector ineffective in hampering the regeneration of corruption. Gaining sufficient understanding on how public officials’ view on corruption is shaped by their culture and society is crucial in ascertaining what needs to be done to prevent corruption from reoccurring in the future. This study demonstrates that transformative learning needs to be systematically carried out to re-engineer organizational mindset to make it intolerant to corruption which includes unlearning the embedded knowledge of corruption. To support the execution of organizational unlearning discernment must be exercised to enable anti-corruption messages to be sent to the target groups. Nevertheless, due to various inherent behavioral issues within the Indonesian public institutions stimulating anti-corruption discernment is in itself a profound challenge. To promote anti-corruption discernment in the Indonesian public sector, this study proposes the Shame-oriented Anti-corruption Discernment Stimulation (SADS) which focuses on the “management of shame” in stimulating anti-corruption discernment within public institutions in Indonesia.

This study is self-funded and is relying primarily on documentary analysis in highlighting the behavioral issues that determine the success and failure of corruption prevention strategy in Indonesia. Future studies may benefit from interviews with experts in Indonesian culture as well as indigenous people who can offer a broader view on how self-conscious emotions such as shame and guilt are actually experienced in different regions in Indonesia.

This paper contributes to the development of corruption prevention strategy by proposing a framework for systematically stimulating anti-corruption discernment within organizations that are part of collectivistic societies.

This paper highlights the importance of behavior-oriented approaches in mitigating corruption in the Indonesian public sector.

Democratic renewal in Sri Lanka as well as a cross the Global South depends on strengthening democratic social movements within varieties of patrimonial capitalism. Patrimonial capitalism, emphasising patron–client relations, coincide with weakening democratic institutional cultures and practices. The dominant corruption/anti-corruption narrative is bracketed with elite class strategies aimed at negotiating a ‘managed corruption’. The realm of representative politics creating consent for patrimonial capitalism is shaped by: ethnic and class relations; the weakening of working-class parties; patriarchal cultures within parties; links with criminal networks; opaque finances and the integration of mainstream media with party patronage.

Democratising the realm of representative politics points towards democratic social movements. The internal dynamics of social movements, their relationships with political parties and collective learning are significant factors that shapes the strategic orientation of social movements. State repression of social movements highlights the need for demilitarisation and the abolition of prisons. The global sense of this local struggle relates to transforming financial markets and platform economies towards notions of financial and digital commons. The integration of different realms of politics, such as representative, movement, life and emancipatory politics, is vital for reinforcing solidarity as the basis for counter-hegemonic struggles.

Moral reasoning research in Western cultures is grounded primarily in Kohlbergian cognitive moral theory. Enumerable investigations about the psychological determinants and cultural dimensions of moral reasoning have provided significant insights about Western decision making and contributed to Western organizational behavioral theory. However, inquiry about these same constructs and how they may interact with moral reasoning in non-Western Southeast Asian trading partner countries has not provided comparable insights. The purpose of this paper is to remedy that by comparing predominant cultural dimensions to levels of moral reasoning in student and graduate populations in Thailand and the USA.

The Defining Issues Test (DIT) measurement of moral reasoning (Rest et al., 1999) and the Values Survey Module (VSM) 2013 (Hofstede and Minkov, 2013) were translated for the first time into Thai, pilot tested, and used to gather cultural and moral reasoning data in Thailand. The same English version instruments were used to gather comparable data among similarly matched US samples. Comparisons are presented in this paper, and differences in approaches to moral decision making are discussed.

Findings indicate that there are both significant psychological and cultural differences between the two nations that affect moral reasoning. Predominant status quo moral reasoning predominates in Thailand, while a polarity between self-interest moral reasoning and higher level abstract idealistic moral reasoning predominates in the USA. Potential cultural influences on these moral reasoning tendencies are discussed.

While findings can be generalized to the sample populations of Thai and US undergraduate students and graduate students who are in the workplace, the considerable time required to complete the two survey instruments precluded inclusion of higher level, veteran managers and public policy administrators in the study. Alternative survey methods need to be developed for investigating these subjects in order to make the combined findings more robust and widely generalizable.

Careful attention to cultural and linguistic variables provided for thorough and effective first-time translations of the DIT and the VSM 2013 from English into the Thai language. These two instruments are now available to other researchers who wish to investigate cultural dimensions and moral reasoning through other research designs. The Thai-version DIT can be obtained from the copyright holder, Center for the Study of Ethical Development (http://ethicaldevelopment.ua.edu/). The Thai-version of the VSM can be obtained through the Geert Hofstede website (www.geerthofstede.nl/).

These findings can help researchers in Western and non-Western countries to better understand the foundations upon which moral reasoning in the two countries is grounded, and can provide insights about how individuals in quite different cultures perceive ethical dilemmas in the workplace and public arena and attempt to solve them. The findings also serve as another entry point for business managers and public policy administrators to not only better understand organizational behavior as regards ethical decision making, but general decision making as well.

This is the first research study comparing cultural dimensions identified by Geert Hofstede and Michael Minkov as measured by the VSM 2013 to moral reasoning as measured by the DIT.

The aim of this study is to investigate the impact of local political uncertainty on the asymmetric cost behavior (i.e. cost stickiness) for listed firms in China.

In this study, the authors manually collect the turnover data of prefecture-city officials as a measure of exogenous fluctuations in political uncertainty and obtain firm-level financial information from the China Stock Market Accounting Research (CSMAR) database. To perform the analysis, the authors augment the traditional cost stickiness model by including the interaction terms of the prefecture-city official turnover, and firm-level and prefecture-city level control variables.

The authors find that political turnover leads to a higher degree of cost stickiness, implying that firms retain slack resources when political uncertainty is high. Moreover, the effect of political turnover on cost stickiness is more pronounced for firms residing in regions with weaker institutional environments, and firms that are privately owned and with smaller size. The authors further provide evidence that policy uncertainty and the threat of losing political connection are two underlying channels. Overall, this study documents that the local political process is an important channel that influences corporate operational decisions.

This study provides the first piece of evidence on the relation between political uncertainty and cost stickiness at the local government level. Moreover, the authors propose and demonstrate two underlying channels through which political uncertainty affects firms' asymmetric cost behavior.

Employing the anti-corruption campaign as an exogenous political shock, this paper examines how political intervention shapes the impact of financial expert CEOs on firm investment decisions.

This paper uses a sample of 2,808 Chinese firms listed in the Shanghai and Shenzhen Stock Exchanges from 2003 to 2016. Panel data is used for conducting the analysis controlling for firm, industry, and year fixed effects.

The authors found that CEOs with financial expertise are sensitive to political intervention when making investment decisions. First, financial expert CEOs spend more on R&D expenditure in private-owned companies and they are associated with less R&D expenditure in state-owned enterprises (SOEs). Second, financial expert CEOs are associated with higher investment expenditure in general, but they become less likely to invest more in the post-anti-corruption period. The reduction in investment expenditure due to the anti-corruption campaign is more pronounced in SOEs than in private-owned companies. Third, the anti-corruption campaign promotes R&D investment in general, but in SOEs, expert CEOs tend to be less likely to invest more on R&D after the anti-corruption shock.

This paper enriches the growing literature on the impact of political intervention and the role of the anti-corruption campaign on corporate behaviour.