Anti-corruption campaign in China and corporate finance

PurposeThis study aims to systematically review the body of research on the association between China’s anti-corruption campaign and corporate finance. In addition, the authors summarize findings related to crime prevention and detection in firm settings and contextualize these findings by comparing them with evidence from other countries.Design/methodology/approachA comprehensive survey is conducted to synthesize existing studies that examine the effects of the anti-corruption campaign, as well as crime prevention and detection, in firm settings.FindingsThe survey shows that the anti-corruption campaign has produced positive changes in several aspects of corporate finance, such as financing policies and investment efficiency. However, its impact on other aspects, including financial performance and firm value, appears to be negative or mixed. The effects of the anti-corruption campaign vary by ownership structure, with state-owned enterprises (SOEs) and non-SOEs exhibiting distinct responses and outcomes. Moreover, the authors analyze the underlying mechanisms through which anti-corruption policies influence corporate finance characteristics. From a criminological perspective, this review contributes to the literature on financial crime prevention and deterrence by showing that China’s anti-corruption campaign, as a form of intensified state regulation, may restructure opportunities for mitigating and preventing crimes such as bribery and graft in corporate settings in China. Finally, the authors offer policy recommendations and identify several directions for future research.Originality/valueThis paper provides the first systematic survey that not only examines the outcomes of anti-corruption campaigns and their effects on firm characteristics but also synthesizes existing findings from the perspective of crime prevention and detection within firms.