In the background of restarting a new round reform,this paper empirically examines the effect of government-enterprise relationship distortion on regional corruption based on Chinese provincial-level panel data,which not only helps to provide a new interpretation for unveiling the mystery of official corruption,but also provides a theoretical basis for the governance of official corruption.Empirical studies show that,because the economic system transition from a planned economy to a market economy is not complete,it causes local governments to have strong economic intervention capability and provides a basis for local governments to strongly intervene the firms in the jurisdiction areas,eventually leading to the distortion of government-enterprise relationship;the distorted government-enterprise relationship provides an opportunity for the frequent occurrence of local official corruption,and higher degree of government-enterprise relationship distortion results in higher-level local official corruption.In terms of the interaction of government-enterprise relationship distortion and local official corruption,on the one hand government-enterprise relationship distortion affects the occurrence of local official corruption;on the other hand,local official corruption also induces more serious government-enterprise relationship distortion.Therefore,this paper uses panel data simultaneous equations to control the biased effect of reverse causality on the econometric results,and it still shows that,the increase in the degree of government-enterprise relationship distortion by one standard deviation leads to the increase in regional corruption by 0.118 standard deviation.The effective governance of the frequent occurrence of official corruption lies in changes of current irrational government-enterprise relationship,the correction of current excessive distortion of government-enterprise relationship,and the elimination of the space and opportunity for administrative powers to set rents to the largest extent.
The Government-enterprise Relationship Corruption and Goverance in the Context of Institutional Transition
Journal of Shanghai University of Finance and Economics Vol. 18, Issue 01, pp. 64 - 74 (2016) DOI:10.16538/j.cnki.jsufe.2016.01.006
Cite this article
Shao Chuanlin. The Government-enterprise Relationship Corruption and Goverance in the Context of Institutional Transition[J]. Journal of Shanghai University of Finance and Economics, 2016, 18(1): 64–74.