The Research About Effects Of Regional Corruption On Firm Efficiency

Efficiency is the life and competitiveness of an enterprise.In order to achieve healthy and long-term development in a highly competitive market,companies must strive to improve their operating efficiency.From the existing research,there are many factors that affect the operating efficiency of the company.However,scholars mainly discussed from the aspects of corporate governance level,financial characteristics and technological innovation,and few studies focus on the impact of external institutional environment,especially the degree of regional corruption,on the firm’s operating efficiency.China’s economy has continued to grow rapidly since the reform and opening up,but it has also caused relatively serious corruption problems.Corruption,as an institutional environment,has an important impact on the firm’s efficiency.Operating efficiency is the ratio of output to input of business activities,which reflects the effective utilization of various resources inputs in the process of business operation.Operating efficiency not only constitutes the basis for the survival of individual enterprises,but also has an impact on the effective operation of the overall economy.Therefore,it is very important to study the impact of regional corruption on firm efficiency.Combining with rent-seeking theory and transaction cost theory,the impact of regional corruption on firm efficiency mainly lies in resource mismatch and resource waste.On the one hand,corruption improves the income of unproductive rent-seeking activities,which will induce entrepreneurs to transfer resources and energy from productive activities to non-productive activities such as rent-seeking,and distort the resource allocation of enterprises.On the other hand,the “rent-extraction” behavior in the form of corruption increases the non-market transaction costs of enterprises,resulting in waste of resources.Based on the theoretical analysis,this paper conducted a normative empirical study.Specifically,this paper manually collects the number of corruption cases registered in the provinces and municipalities in China from 2000 to 2017,and uses the technical efficiency calculated by the DEA and SFA methods as a measurement of operating efficiency to systematically exam the impact of regional corruption on firm efficiency,and further explore the heterogeneity and channels of this economic impact.The empirical results show that regional corruption has a significant inhibitory effect on firm efficiency,and this effect is stronger for non-state-owned firms and firms in regions with less marketization.Furthermore,the main channel through which regional corruption affects firm efficiency is pure technical efficiency,rather than scale efficiency.This research not only provides the latest empirical evidence for an in-depth understanding of the economic consequences of corruption,but also has certain guiding significance for preventing corruption and improving the firm efficiency.On the one hand,the government should further promote anti-corruption actions,improve supervision measures and strengthen punishment to fundamentally curb the spread of corruption.At the same time,they should also continue to promote market-oriented reforms,purify the business environment for enterprises to optimize resource allocation and enhance operating efficiency.On the other hand,business operators especially private enterprises,should fully realize the loss of efficiency brought by rent-seeking,focus on long-term innovative development strategies instead of seeking shortterm rent-seeking gains,and follow the path of sustainable development.