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5230Good corporate governance mechanism is one of the effective ways to curb corruption. After the exposure of executive corruption, will the enterprise restore its reputation by actively improving the governance mechanism? Do participants in capital market and product market give positive recognition to enterprise reputation restoration? In order to answer the above questions, based on the institutional background of anti-corruption in China, this paper takes the manual collected executive corruption data of listed companies from 2003 to 2015 as a sample, and uses the ordinary least squares（OLS）method, the propensity score matching（PSM）method and the difference-in-differences（DID）model to test the relevant hypothesis, so as to examine the impact of reputation restoration behavior to improve its governance mechanism of the enterprise with damaged reputation on market cognition and corporate value after corruption exposure.
The results show that: （1）In the first year after the exposure of corruption, the reputation damaged enterprise will actively improve the governance mechanism, and this reputation restoration behavior can be recognized by the market. Among them, the capital market is more sensitive to this kind of reputation restoration behavior; the upstream and downstream enterprises of the enterprise exposed to corruption in the product market are more cautious about this kind of reputation restoration behavior, and the response is lagging behind.（2）After the reputation damage, the reputation restoration behavior that the enterprise actively improves the governance mechanism can enhance corporate value, and can further enhance corporate value by improving the market cognition. Therefore, it is effective to expose the corruption of senior executives in the way of corporate reputation restoration by improving corporate governance structure.（3）Further research shows that the enterprise exposed to corruption in non-monopoly industries can gain more market recognition and enhance the enterprise by actively improving the governance mechanism after reputation damage. Even the reputation damaged enterprise with low degree of information disclosure can achieve the purpose of reputation restoration by actively improving the governance mechanism. The results of robustness tests, such as multi-stage DID test, PSM method to control endogeneity and replace governance mechanism variables, also do not change the main conclusions of this paper.
