Anti-Corruption, Political Association and Enterprise Innovation
Mingzhe Yu

Abstract
The development of enterprises can depend on two ways. On the one hand, enterprises can obtain some privileges by establishing good political connections with the government. On the other hand, enterprises can enhance their competitiveness through technological innovation. After the 18th national congress of the communist party of China (NPC), the Chinese government imposed strong sanctions on a number of government officials for corruption. This paper collects the data of Chinese listed companies from 2011 to 2013, and uses the “difference-in-difference” method to study the relationship between political association and innovation of enterprises. It is found that anti-corruption policy can limit government official's protection of enterprises, reduce the incentive for enterprises to seek development through political connections, thus enhancing the incentive for enterprises to seek development through innovation, and finally improve the innovation ability of enterprises. And it's also a difference between different types of businesses, different levels of corruption.

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