The price of official-business collusion

Purpose: The purpose of this paper is to investigate whether the anti-corruption campaign, “Hunting the Tigers,” incurs a significant short-term loss of shareholders’ returns. Design/methodology/approach: A sophisticated event study approach is employed. Findings: The results show that the “Hunting the Tigers” has incurred a significant short-term loss of investment returns for shareholders in China’s main stock market board. In addition, the beginning of a new assault on China’s official mogul corruption in another round of political anti-corruption cycle after the 18th National Congress of the CPC has reduced this price significantly. Originality/value: This finding should be perceived as the price of the corruption of official-business collusion within capital markets in contemporary China.