| The typical fact that there is a serious market segmentation in China has become a consensus in academic circles and has been mentioned many times in policy documents.Literature has studied the important influence of geographical distance,dialect and local government competition on China’s market segmentation,but the academic community lacks enough attention to the typical phenomenon of market segmentation caused by local government officials’ corruption.Corruption is a kind of behavior of seeking private interests with public power.In China’s transitional economic system,local government officials have greater autonomy over the economic policies in their jurisdiction,and their partial supply of policy resources in exchange for personal interests constitutes an important source of corruption.Based on the high-risk,secretive and interdependent nature of corruption,in the long-term interest exchange,local government officials and enterprises under their jurisdiction gradually build an abnormal network of close ties,forming a strong regional circle culture,repelling people and things outside the circle.and forming an obvious obstacle to the entry of foreign enterprises and the cross regional flow of capital.Therefore,the corruption of local government officials seeking personal interests with public power is also an important reason for the market segmentation and resource flow.However,the existing studies are either difficult to distinguish the role of local government officials’ corruption motivation in government behavior and policy choice,or all assume that officials’ ways of economic development are legal,which leads to the lack of academic attention on market segmentation and governance mechanism caused by corruption."The way of governing a country is to govern officials." Cracking down on corruption is the basic guarantee to lead the country forward steadily.Since the eighteen Party’s Congress,the Party Central Committee with Comrade Xi Jinping as its core has thoroughly implemented the policy of strictly administering the party,and has dealt with a large number of corrupt cadres in line with the principle of "beating tiger,shooting flies and hunting foxes",showing that the party and the state insist on a clear attitude towards zero tolerance of corruption.Then,can China’s anti-corruption governance break the artificial barriers and segmentation between provinces caused by the abnormal relationship network between provincial officials and businessmen,and then promote the flow of resources and regional integration?Undoubtedly,the cross-province M&As is the most important and direct way to transfer or transplant capital,technology and management experience between provinces.Therefore,this paper studies the relationship between provincial anti-corruption governance and cross-province flow of resources,considering the effect of anti-corruption governance on attracting investment and its important impact on breaking market segmentation.Specifically,based on the data of M&A of China’s A-share listed companies from 2004 to 2018,this paper manually identifies 10 corruption incidents of provincial Party secretary or governor from 2004 to 2018,and uses the difference-in-difference method to empirically test the impact,heterogeneity and economic consequences of provincial anti-corruption governance on cross-province M&As of non-local enterprises.The main contents of this paper are as follows:Firstly,this paper studies the influence of provincial anti-corruption governance on cross-province M&As decision-making of non-local enterprises from both theoretical and empirical aspects.The abnormal relationship network between local government officials and enterprises under their jurisdiction,which is derived from corruption,hinders the cross-province M&As and cross regional flow of resources,and intensifies the market segmentation.The provincial anti-corruption governance is conducive to breaking the artificial barriers between provinces and promoting the entry of non-local enterprises.Consistent with the theoretical analysis,the empirical test of this paper finds that provincial anti-corruption makes it easier for enterprises in the jurisdiction to be merged by enterprises in other places;From the macro level,this paper also finds that provincial anti-corruption makes the inflow and value of M&A increase significantly.This shows that the provincial anti-corruption governance breaks the abnormal relationship network,purifies the political ecology and investment environment,and significantly promotes the cross-province M&As inflow,which is the key strategy to reduce the degree of market segmentation in China.Secondly,based on the heterogeneity of the characteristics of the acquirers,the provinces where the acquirers are located,and the provinces where the target are located,this paper further investigates the cross-sectional differences of the provincial anticorruption governance on the cross-province M&As decisions of non-local enterprises in different scenarios.The empirical results show that after the corruption of the Secretary of the provincial Party committee or governor,the higher the growth,the stronger the profitability,the higher the cost of debt financing,the higher the level of industrial policy support and innovation,the easier it is to acquire the targets in this region and enter the local market.Compared with those from economically underdeveloped provinces,acquirers from economically developed provinces are more likely to merge with targets in anti-corruption governance provinces;At the same time,the more developed the economy of target provinces and the higher the degree of marketization,the more likely the acquirers merge with targets in anti-corruption governance provinces.This shows that the entry of acquirers into anti-corruption provinces is affected by both market driven and policy driven factors.Moreover,the external environment of the province also has a significant impact on the effectiveness of anti-corruption governance.Thirdly,this paper examines the economic consequences of provincial anticorruption governance and cross-province M&As performance from the dual dimensions of the acquirer level and the target province level.The empirical study shows that the cross-province M&As caused by provincial anti-corruption governance can enhance the firm value of acquirers and make the acquirer obtain positive long-term and short-term acquisition performance.Mechanism test shows that the positive cross-province M&As performance mainly comes from the spillover effect of capital,technology,management and other advanced production factors of the acquirers,as well as the policy support role of the local government of the target province.The mechanism test of this paper finds that after provincial anti-corruption governance led to cross-province M&As,the transplantation effect of corporate political capital of foreign landlords did not work.However,this also proved the effectiveness of our country’s anti-corruption governance.From the perspective of the target province,the inflow of cross-province M&As caused by provincial anti-corruption governance can also significantly improve the economic growth level of the province,indicating that the inflow of advanced productivity factors such as capital,technology and talents is an important way for anticorruption governance to promote provincial economic development.The conclusion of this paper shows that the cross-province M&As caused by provincial anti-corruption governance not only improves the acquirers’ performance,but also has a significant role in promoting the economic growth of the inflow province,which has a "win-win" effect at the firm level and the province level.Based on the existing research,this paper further studies the influence,heterogeneity and economic consequences of provincial anti-corruption governance on cross-province M&As of non-local enterprises.The innovations are as follows:Firstly,this paper enriches the relevant literature on the causes of market segmentation and how to eliminate the market segmentation and its negative impact on local economy.On the one hand,this paper enriches the research on the causes of market segmentation in China.Most of the existing researches focus on the market segmentation caused by geographical distance,cultural differences and administrative decentralization of local government.However,few literatures study the impact of corruption of local government officials on the degree of market segmentation in their jurisdiction.This study shows that the abnormal relationship network between local government officials and enterprises under their jurisdiction caused by corruption is also an important incentive for China’s market segmentation,and the research conclusion is an important supplement to the relevant research on the causes of China’s market segmentation.On the other hand,this paper expands the research on how to reduce the degree of market segmentation and eliminate its negative impact on the provincial economy.The existing research on the solution of market segmentation and its economic consequences is relatively less.This paper finds that provincial anti-corruption governance can break the abnormal government business network in the jurisdiction and promote the inflow of cross-province M&As.This paper also finds that the inflow of cross-province M&As caused by provincial anti-corruption governance can not only promote the acquirers to obtain positive value-added,but also significantly improve the provincial economic development due to the increase of the inflow of cross-province M&As,which has a winwin effect.The conclusion enriches the research of market segmentation solution and its economic consequences.Secondly,this study enriches the relevant literature of the economic consequences of provincial anti-corruption governance.The existing research on the economic consequences of anti-corruption is mainly carried out from the macro and micro levels.In addition to studying the impact of anti-corruption governance on economic growth at the macro level,most studies at the micro level explore the impact of anti-corruption governance on enterprise innovation behavior,charity behavior,investment efficiency and enterprise value.However,few studies focus on the role of provincial anti-corruption governance in eliminating market segmentation and promoting cross-province flow of resources,and few studies observe the impact of anti-corruption governance on micro enterprise mergers and acquisitions.M&A is an important way to adjust the existing resources and strategic transformation of enterprises.Cross-province M&A is an important carrier for the free flow of capital,talents,technology and other resources in different regions.Therefore,this paper studies provincial anti-corruption governance and capital inflow from the perspective of cross-province M&As.The results show that provincial anti-corruption governance can break the abnormal political and business network relationship between corrupt officials and enterprises under their jurisdiction,break down the artificial barriers between provinces,promote cross-province M&As among enterprises,and further facilitate the flow of resources between different provinces.The conclusion enriches the research on the economic consequences of anti-corruption.Thirdly,this paper expands the relevant research on the impact of the institutional environment of the target province on the cross-province M&As behavior.The macro institutional environment has an important impact on the governance and decisionmaking of micro enterprises,and it has always been a research hot-spot.In the field of M&As,a large number of literature have studied the effect of macro environment on cross-province M&As behavior.However,most of these studies start from the institutional environment of the acquirer provinces,and investigate the influence of the financial environment and political ecology of the acquirer provinces on their M&As behavior.There are few studies from the perspective of the target province to investigate the effect of the institutional environment of the target province on the cross-province M&As behaviors.This paper finds that after the anti-corruption governance,the institutional environment of the target province can be optimized,which is conducive to the cross-province M&As.The conclusion of this paper not only expands the relevant research on the impact of the institutional environment of the target province on the crossprovince M&As,but also has a strong reference significance for the local government to attract non-local enterprises to operate locally. |
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