The value of political connections in opaque firms: Evidence from China's file 18
| Autor: | Changyun Wang, Jianyu Zeng, Yi Hu, Gang Xiao |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
040101 forestry
Economics and Econometrics 050208 finance 05 social sciences Enterprise value 04 agricultural and veterinary sciences Monetary economics Politics Information asymmetry Central government 0502 economics and business Value (economics) 0401 agriculture forestry and fisheries Business External financing China Enforcement Finance |
| Zdroj: | Pacific-Basin Finance Journal. 55:329-351 |
| ISSN: | 0927-538X |
| Popis: | We examine the value of political connections in opaque firms under the setting of China's File 18. The Chinese central government has enforced File 18 since 2013 and exogenously constrained firms' political connections through independent boards. We find that the value of firms with politically-connected independent directors has significantly declined after the enforcement of File 18 only for firms with relatively higher degrees of information asymmetry. The value decline is greater among opaque firms with greater external financial dependence or lower credit worthiness, and is manifested in the drop of external financing, investments and sales growth among opaque firms. Our findings are consistent with that political connections are more conductive for firms that are more opaque by providing external financing support. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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