Corruption is usually viewed as an impediment to investment and growth. However, China's experience suggests that the issue is probably more complex: In the past government officials would go out of their way to promote investment and development. But since the start of a far-reaching...

We evaluate the impact of the last Chinese anti-corruption campaign (ACC) on firms’ investment. We exploit the sudden and abnormal surge in the rate of “Tigers” investigations due to the increase in anti-corruption monitoring. This change led to an overall decrease in investment of private...