IDEAS home Printed from https://ideas.repec.org/a/sae/evarev/v46y2022i2p103-137.html
   My bibliography  Save this article

Anti-Corruption Campaign and Firm Financial Performance: Evidence From Vietnam Firms

Author

Listed:
  • Khanh Hoang
  • Hieu T. Doan
  • Thanh T. Tran
  • Thang X. Nguyen
  • Anh Q. Le

Abstract

Background Corruption affects businesses in various ways. Anti-corruption, on the other hand, can improve the institutions of the country as well as business operations. Vietnam, as a socialist-oriented country with an ongoing high-profile anti-corruption campaign, provides us a unique setting to evaluate the impacts of anti-corruption on corporate performance. Objectives We address two questions: (1) what is the effect of anti-corruption on the performance of private-owned firms in Vietnam? and (2) how does anti-corruption influence the performance of firms with state ownership (FSOs) in Vietnam? Research design To investigate the impact of anti-corruption on performance of firms with different ownership settings, we use the establishment of the Central Anti-Corruption Steering Committee of Vietnam as a quasi-natural experiment for difference-in-differences analysis. We generate treatment effects of private holding and the state block ownership. To validate the findings, we construct a novel news-based anti-corruption index from Vietnamese online newspapers and use it in a robustness test to evaluate anti-corruption’s impacts on firm performance. Results and Conclusions We find a positive impact of the anti-corruption campaign on private firms’ performance, supporting the social norm perspective of how corruption affects businesses. The empirical results indicate a negative impact of the campaign on FSOs’ performance. The findings suggest that anti-corruption benefits private firms via improving the institutional quality of the country while improving the financial transparency of FSOs. Our study provides a method for measuring anti-corruption which is virtually unobservable and absent in the literature. The findings have implications for policymaking in contemporary Vietnam.

Suggested Citation

  • Khanh Hoang & Hieu T. Doan & Thanh T. Tran & Thang X. Nguyen & Anh Q. Le, 2022. "Anti-Corruption Campaign and Firm Financial Performance: Evidence From Vietnam Firms," Evaluation Review, , vol. 46(2), pages 103-137, April.
    • Handle: RePEc:sae:evarev:v:46:y:2022:i:2:p:103-137
    DOI: 10.1177/0193841X211072707
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0193841X211072707
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0193841X211072707?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alexander Dyck & Natalya Volchkova & Luigi Zingales, 2008. "The Corporate Governance Role of the Media: Evidence from Russia," Journal of Finance, American Finance Association, vol. 63(3), pages 1093-1135, June.
    2. Gan, Weiyu & Xu, Xixiong, 2019. "Does anti-corruption campaign promote corporate R&D investment? Evidence from China," Finance Research Letters, Elsevier, vol. 30(C), pages 292-296.
    3. Raymond Fisman & Edward Miguel, 2007. "Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1020-1048, December.
    4. Li, Hongbin & Meng, Lingsheng & Wang, Qian & Zhou, Li-An, 2008. "Political connections, financing and firm performance: Evidence from Chinese private firms," Journal of Development Economics, Elsevier, vol. 87(2), pages 283-299, October.
    5. Scott R. Baker & Nicholas Bloom & Steven J. Davis, 2016. "Measuring Economic Policy Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(4), pages 1593-1636.
    6. Jessie Zhou & Mike Peng, 2012. "Does bribery help or hurt firm growth around the world?," Asia Pacific Journal of Management, Springer, vol. 29(4), pages 907-921, December.
    7. Pierre-Xavier Meschi, 2009. "Government corruption and foreign stakes in international joint ventures in emerging economies," Post-Print hal-01839643, HAL.
    8. Jian Zhang, 2018. "Public Governance and Corporate Fraud: Evidence from the Recent Anti-corruption Campaign in China," Journal of Business Ethics, Springer, vol. 148(2), pages 375-396, March.
    9. Wang, Yuanyuan & You, Jing, 2012. "Corruption and firm growth: Evidence from China," China Economic Review, Elsevier, vol. 23(2), pages 415-433.
    10. Klaus Uhlenbruck & Peter Rodriguez & Jonathan Doh & Lorraine Eden, 2006. "The Impact of Corruption on Entry Strategy: Evidence from Telecommunication Projects in Emerging Economies," Organization Science, INFORMS, vol. 17(3), pages 402-414, June.
    11. Tarek A Hassan & Stephan Hollander & Laurence van Lent & Ahmed Tahoun, 2019. "Firm-Level Political Risk: Measurement and Effects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 2135-2202.
    12. World Bank, 2010. "World Development Report 2010," World Bank Publications - Books, The World Bank Group, number 4387.
    13. Qianwei Ying & Jinsong Liu, 2018. "Anti-corruption campaign in China: good news or bad news for firm value?," Applied Economics Letters, Taylor & Francis Journals, vol. 25(17), pages 1183-1188, October.
    14. Huong Vu & Tuyen Quang Tran & Tuan Nguyen & Steven Lim, 2018. "Corruption, Types of Corruption and Firm Financial Performance: New Evidence from a Transitional Economy," Journal of Business Ethics, Springer, vol. 148(4), pages 847-858, April.
    15. Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
    16. Hongbin Cai & Hanming Fang & Lixin Colin Xu, 2011. "Eat, Drink, Firms, Government: An Investigation of Corruption from the Entertainment and Travel Costs of Chinese Firms," Journal of Law and Economics, University of Chicago Press, vol. 54(1), pages 55-78.
    17. Zhou, Mengling & Wang, Bing & Chen, Zhongfei, 2020. "Has the anti-corruption campaign decreased air pollution in China?," Energy Economics, Elsevier, vol. 91(C).
    18. Jiang, Ting & Nie, Huihua, 2014. "The stained China miracle: Corruption, regulation, and firm performance," Economics Letters, Elsevier, vol. 123(3), pages 366-369.
    19. Yeh, Yin-Hua & Shu, Pei-Gi & Chiu, Shean-Bii, 2013. "Political connections, corporate governance and preferential bank loans," Pacific-Basin Finance Journal, Elsevier, vol. 21(1), pages 1079-1101.
    20. Peerayuth Charoensukmongkol, 2016. "The interconnections between bribery, political network, government supports, and their consequences on export performance of small and medium enterprises in Thailand [Las interconexiones entre sob," Journal of International Entrepreneurship, Springer, vol. 14(2), pages 259-276, June.
    21. Gjalt de Jong & Phan Anh Tu & Hans van Ees, 2012. "Which Entrepreneurs Bribe and what do they Get from It? Exploratory Evidence from Vietnam," Entrepreneurship Theory and Practice, , vol. 36(2), pages 323-345, March.
    22. Kong, Dongmin & Wang, Li & Wang, Maobin, 2017. "Effects of anti-corruption on firm performance: Evidence from a quasi-natural experiment in China," Finance Research Letters, Elsevier, vol. 23(C), pages 190-195.
    23. Nguyen, Cuong Viet, 2021. "Last corrupt deed before retirement? Evidence from a lower middle-income country," Journal of Development Economics, Elsevier, vol. 151(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Du, Yan & Goodell, John W. & Piljak, Vanja & Vulanovic, Milos, 2022. "Subsidiary financing choices: The roles of institutional distances from home countries," International Review of Financial Analysis, Elsevier, vol. 83(C).
    2. Vu M. Ngo & Toan L. D. Huynh & Phuc V. Nguyen & Huan H. Nguyen, 2022. "Public sentiment towards economic sanctions in the Russia–Ukraine war," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(5), pages 564-573, November.
    3. Khanh Hoang, 2022. "Silent but deadly: Political corruption and voluntary ESG disclosure in the United States," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 2775-2793, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shenghui Tong, 2022. "Corruption and anti‐corruption in China: a review and future research agenda," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 36(1), pages 3-16, May.
    2. Zhou, Kevin Zheng & Wang, Kui & Xu, Dean & Xie, En, 2022. "Drinking poison to quench thirst: Does bribery foster firm performance in China?," Journal of Business Research, Elsevier, vol. 147(C), pages 505-517.
    3. Boubaker, Sabri & Liu, Pei-Zhi & Ren, Yi-Shuai & Ma, Chao-Qun, 2024. "Do anti-corruption campaigns affect corporate environmental responsibility? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    4. Lurdes Martins & Jorge Cerdeira & Aurora A.C. Teixeira, 2020. "Does corruption boost or harm firms’ performance in developing and emerging economies? A firm‐level study," The World Economy, Wiley Blackwell, vol. 43(8), pages 2119-2152, August.
    5. Cheng, Maoyong & Geng, Hongyan, 2021. "Do local firms employ political activities to respond to political uncertainty?," Journal of Asian Economics, Elsevier, vol. 73(C).
    6. Li Tian & Jing Yu Yang & Jiatao Li, 2021. "Does legal registration help or hurt? The effect of government corruption on resource acquisition by nascent ventures in an emerging economy," Asia Pacific Journal of Management, Springer, vol. 38(2), pages 547-572, June.
    7. Adomako, Samuel & Amankwah-Amoah, Joseph & Tarba, Shlomo Y. & Khan, Zaheer, 2021. "Perceived corruption, business process digitization, and SMEs’ degree of internationalization in sub-Saharan Africa," Journal of Business Research, Elsevier, vol. 123(C), pages 196-207.
    8. Demir, Firat & Hu, Chenghao & Liu, Junyi & Shen, Hewei, 2022. "Local corruption, total factor productivity and firm heterogeneity: Empirical evidence from Chinese manufacturing firms," World Development, Elsevier, vol. 151(C).
    9. Malesky, Edmund J. & Nguyen, Thang V. & Bach, Thang N. & Ho, Bao D., 2020. "The effect of market competition on bribery in emerging economies: An empirical analysis of Vietnamese firms," World Development, Elsevier, vol. 131(C).
    10. Tian, Ni & Zhang, Zongyi, 2018. "How do anticorruption measures affect executive incentive?," Finance Research Letters, Elsevier, vol. 24(C), pages 179-185.
    11. Cai, Weixing & Hu, Feng & Xu, Fangming & Zheng, Liyi, 2022. "Anti-corruption campaign and corporate cash holdings: Evidence from China," Emerging Markets Review, Elsevier, vol. 51(PA).
    12. Wu, Tao & Delios, Andrew & Chen, Zhaowei & Wang, Xin, 2023. "Rethinking corruption in international business: An empirical review," Journal of World Business, Elsevier, vol. 58(2).
    13. Ha, Le Thanh & Dung, Hoang Phuong & Thanh, To Trung, 2023. "Bribery, global value chain decisions, and institutional constraints: Evidence from a cross-country firm-level data," International Economics, Elsevier, vol. 173(C), pages 119-142.
    14. Li, Guangzi & Chan, Kam C., 2021. "Anti-corruption intensity and loan contracting: Evidence from non-state owned firms in China," Emerging Markets Review, Elsevier, vol. 49(C).
    15. Lee, Mina & Mutlu, Canan & Lee, Seung-Hyun, 2023. "Bribery and Firm Growth: Sensemaking in CEE and Post-Soviet Countries," Journal of International Management, Elsevier, vol. 29(1).
    16. Lu, Jiankun & Zhang, Hongsheng & Meng, Bo, 2021. "Corruption, firm productivity, and gains from import liberalization in China," Economic Modelling, Elsevier, vol. 101(C).
    17. Wang, Xin & Song, Di, 2021. "Does local corruption affect IPO underpricing? Evidence from China," International Review of Economics & Finance, Elsevier, vol. 73(C), pages 127-138.
    18. Thang V. Nguyen & Minh H. Doan & Nhung H. Tran, 2021. "The perpetuation of bribery–prone relationships: A study from Vietnamese public officials," Public Administration & Development, Blackwell Publishing, vol. 41(5), pages 244-256, December.
    19. repec:idn:journl:v:21:y:2019:i:3g:p:1-22 is not listed on IDEAS
    20. Le Thanh Ha & Dao Hanh Le & Nguyen Ngoc Mai, 2021. "Bribes, market power and access to credit: evidence from cross-country firm-level data," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 68(4), pages 527-550, December.
    21. He, Wenjian & Chen, Xiaoyang & Liu, Zhiyong John, 2022. "Can anti-corruption help realize the “strong” Porter Hypothesis in China? Evidence from Chinese manufacturing enterprises," Journal of Asian Economics, Elsevier, vol. 80(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:evarev:v:46:y:2022:i:2:p:103-137. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.