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Eat, Drink, Firms, Government: an Investigation of Corruption from the Entertainment and Travel Costs of Chinese Firms by Hongbin Cai, Hanming Fang and Lixin Colin Xu

By: Contributor(s): Material type: TextTextSeries: The Journal of Law and Economics ; Volume 54, number 1Chicago: University of Chicago Press; 2011Content type:
  • text
Media type:
  • unmediated
Carrier type:
  • volume
ISSN:
  • 00222186
Subject(s): LOC classification:
  • HB73 JOU
Online resources: Summary: We propose entertainment and travel costs (ETC) expenditures as a measure of corruption in Chinese firms. These expenses are publicly reported in firms’ accounting books, and on average they amount to about 3 percent of a firm’s total value added. We find that ETC is a mix that includes grease money to obtain better government services, protection money to lower tax rates, managerial excesses, and normal business expenditures to build relational capital with suppliers and clients. Entertainment and travel costs overall have a significantly negative effect on firm productivity, but we also find that some components of ETC have substantial positive returns to firms
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Holdings
Item type Current library Call number Vol info Copy number Status Notes Date due Barcode
Journal Article Journal Article Main Library - Special Collections HB73 JOU (Browse shelf(Opens below)) Vol. 54, no.1 (pages 55-78) SP9486 Not for loan For In House Use Only

We propose entertainment and travel costs (ETC) expenditures as a measure of corruption in Chinese firms. These expenses are publicly reported in firms’ accounting books, and on average they amount to about 3 percent of a firm’s total value added. We find that ETC is a mix that includes grease money to obtain better government services, protection money to lower tax rates, managerial excesses, and normal business expenditures to build relational capital with suppliers and clients. Entertainment and travel costs overall have a significantly negative effect on firm productivity, but we also find that some components of ETC have substantial positive returns to firms

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