The Anti-Corruption Campaign And Catering Industry In China

Abstract

This paper explores the effect of the recent anti-corruption campaign on catering industry in China. In this paper, we conduct an event study using a dataset of card transaction records for 470,421 restaurants across 2118 cities and counties from 2011-2014. The campaign reduced catering consumption which is an important way of corruption by 38.4%. The reduction was the largest in top-tier cities. The frequency of catering consumption tended to increase between the announcement and the implementation of the campaign. It experienced significant increase during holidays after the campaign. In smaller cities, expensive restaurant consumption experienced huge reductions but cheaper restaurant consumption didn't. Lower-amount transactions increased significantly while higher-amount transactions decreased. These results provide empirical support for the concern that officials may respond to the anti-corruption policy by cutting down amount per transaction, but increasing the frequency of dining out. Keywords: Anti-corruption, Catering, Card Transaction, Eight-point Code