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Corruption and corporate cross-regional supply chain: Evidence from the anti-corruption campaign in China

Author

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  • Qian, Xianhang
  • Zhao, Kunzhu

Abstract

This paper examines the effect of corruption on the corporate cross-regional supply chain using the anti-corruption campaign in China as a quasi-experiment. The difference-in-differences estimates indicate that the anti-corruption campaign increases firms' purchasing proportion from cross-regional suppliers. The effect is more pronounced for firms without political connections and government customers, firms in more competitive industries, and firms located in regions with higher financial pressure and weaker government-market relationships. Studies on potential channels show that increased corporate operating efficiency and decreased corporate financial constraints and business entertainment expenses are potential channels that the anti-corruption campaign increases corporate cross-regional purchasing. Finally, the increased corporate cross-regional purchasing accompanied by the anti-corruption campaign decreases corporate operating costs and risks, and increases operating performance after two periods. Overall, our findings highlight the important role of the institutional environment in shaping firms’ supply chains.

Suggested Citation

  • Qian, Xianhang & Zhao, Kunzhu, 2026. "Corruption and corporate cross-regional supply chain: Evidence from the anti-corruption campaign in China," Economic Modelling, Elsevier, vol. 162(C).
    • Handle: RePEc:eee:ecmode:v:162:y:2026:i:c:s0264999326001884
    DOI: 10.1016/j.econmod.2026.107659
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    Keywords

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    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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