Does anti-corruption campaign promote corporate R&D investment? Evidence from China

We investigate the impact of China's anti-corruption campaign on corporate innovation. Our. empirical results corroborate a significant positive association between anti-corruption intensity and firm's R&D expenditures, which indicate that firms headquartered in provinces with stronger anti-corruption efforts, are less likely to choose relation-orientated strategy, and thus invest more in R&D activities. In addition, compared with SOEs, the positive effect of anti-corruption on R&D spending is more pronounced for Non-SOEs. This paper provides insights for understanding the impact of corrupt environment on firm performance and its underlying path.