The Substitution Effect of Chinese Anti-Corruption “Alcohol Ban”

Over the past decade, China has intensified its anti-corruption efforts. On 21 December 2012, “Alcohol Consumption Prohibition at Military Functions” was announced, which made consumption of high-end Chinese Baijiu decline. We apply principal-agent theory to analyze potential substitution effect, and then, we difference in model event study method test effect between foreign alcohol by using macro- micro-data. The results indicate that, response Ban”, consume more imported wine expensive spirits. What is more, CARs companies listed on U.S. stock market significantly increase. conclude that there exist effects after necessary for government comprehensively investigate when formulating policies, because it may partially weaken effectiveness policy.