How Does Corruption Affect Economic Growth? : An Instrumental Variable Approach Based On Secretaries of the Provincial Commission for Discipline Inspection in China

Corruption is generally regarded as a key obstacle for economic growth, and the endogeneity between corruption and economic performance is difficult to address in empirical studies. The impact of corruption on regional economic growth is examined in this research using Chinese province panel data from 2008 to 2015 and difference-in-differences (DID). Employing the dummy whether the secretary of the provincial commission for discipline inspection (CDI) served at the central commission for discipline inspection (CDI) after 2012 as the instrument for corruption, this study finds that corruption significantly impedes economic growth. This study also discovers that while corruption has no discernible impact on the growth of fixed asset investment in state sectors, it has a considerable negative impact on non-state sectors, where it significantly slows fixed asset investment growth