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Swiss watch cycles: Evidence of corruption during leadership transition in China

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  • Lan, Xiaohuan
  • Li, Wei

Abstract

This paper presents evidence of corruption during China's leadership transitions when governmental positions are open for competition. The import value of luxury watches, a popular medium for corrupt exchanges, peaked during regular leadership transitions in 1996–97, 2001–02, and 2006–07. However, imports of nonluxury watches and other luxury items unpopular for corrupt exchanges did not exhibit the same cycle. Nor did imports of luxury watches increase in Hong Kong, Singapore, or the US. During the leadership transition of 2011–12, since wearing a conspicuous luxury watch was by then likely to be exposed on social media and trigger an anti-corruption investigation, this “Swiss watch cycle” vanished.

Suggested Citation

  • Lan, Xiaohuan & Li, Wei, 2018. "Swiss watch cycles: Evidence of corruption during leadership transition in China," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1234-1252.
    • Handle: RePEc:eee:jcecon:v:46:y:2018:i:4:p:1234-1252
    DOI: 10.1016/j.jce.2018.07.019
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    Cited by:

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    3. Chaoqun Chen & Yonghong Zhou, 2021. "Institutional endowment, curse, and the impact of external political shock: The case of Macao," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2433-2453, November.
    4. Pavlo R. Blavatskyy, 2021. "Obesity of politicians and corruption in Ukraine in 2000–2020– Reply," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(2), pages 361-365, April.
    5. Danqing Wang & Zhitao Zhu & Shuo Chen & Xiaowei Rose Luo, 2021. "Running out of steam? A political incentive perspective of FDI inflows in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(4), pages 692-717, June.
    6. Pavlo Blavatskyy, 2021. "Obesity of politicians and corruption in post‐Soviet countries," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(2), pages 343-356, April.
    7. Zhentao Shi & Jingyi Huang, 2019. "Forward-Selected Panel Data Approach for Program Evaluation," Papers 1908.05894, arXiv.org, revised Apr 2021.
    8. Shi, Zhentao & Huang, Jingyi, 2023. "Forward-selected panel data approach for program evaluation," Journal of Econometrics, Elsevier, vol. 234(2), pages 512-535.
    9. Yiyuan Ma & Youzhi Xiao, 2022. "The Substitution Effect of Chinese Anti-Corruption “Alcohol Ban”," Sustainability, MDPI, vol. 14(12), pages 1-13, June.
    10. Hao, Zhuoqun & Liu, Yu & Zhang, Jinfan & Zhao, Xiaoxue, 2020. "Political connection, corporate philanthropy and efficiency: Evidence from China’s anti-corruption campaign," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 688-708.

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    More about this item

    Keywords

    Corruption; Political selection; China; Luxury watches;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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