LAUSR

Corruption plagues both developed and developing countries. It is a serious obstacle to China’s development, perilous to ignore. However, characterised by the most secretive types of behaviour, studying corruption is particularly difficult. Applying the vector autoregressive model (VAR) to consecutive 36-month data, we analyse empirically the corruption status quo and its impact in China. We find a short-term negative impact of the current anti-corruption campaign in China on the economic growth of its state-owned industries, while any positive effect, e.g. improving the quality of economic growth, can not be demonstrated. The objective data used reduce significantly the confusion surrounding traditional (anti-)corruption studies, which have relied heavily on survey data or subjective evaluation.