Political Connections and Minority-Shareholder Protection: Evidence from Securities-Market Regulation in China
| Autor: | Henk Berkman, Lawrence Fu, Rebel A. Cole |
|---|---|
| Rok vydání: | 2010 |
| Předmět: |
Economics and Econometrics
Restructuring Corporate governance Enterprise value jel:G34 jel:G32 China convergence enforcement expropriation political connections investor protection minority shareholder regulation tunneling jel:G38 Market economy Shareholder Expropriation Accounting Goodwill Business Enforcement Emerging markets Finance |
| Zdroj: | Journal of Financial and Quantitative Analysis. 45:1391-1417 |
| ISSN: | 1756-6916 0022-1090 |
| DOI: | 10.1017/s0022109010000608 |
| Popis: | We examine the wealth effects of three regulatory changes designed to improve minorityshareholder protection in the Chinese stock markets. Using the value of a firm’s related-party transactions as an inverse proxy for the quality of corporate governance, we find that firms with weaker governance experienced significantly larger abnormal returns around announcements of the new regulations than did firms with stronger governance. This evidence indicates that securities-market regulation can be effective in protecting minority shareholders from expropriation in a country with weak judicial enforcement. We also find that firms with strong ties to the government did not benefit from the new regulations, suggesting that minority shareholders did not expect regulators to enforce the new rules on firms where block holders have strong political connections. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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