Increasing attention has been focused on the extent to which corporate political connections influence the growing pollution due to the rapid growth in the popularity of firm pollution in developing countries.We adopt...Increasing attention has been focused on the extent to which corporate political connections influence the growing pollution due to the rapid growth in the popularity of firm pollution in developing countries.We adopt a static threshold regression model to investigate the effects of heterogeneous environmental regulation on political connections and firm pollution based on the panel data from China’s A-share listed companies from 2012 to 2019.The empirical results show a non-linear relationship between the degree of political connection of listed company executives and the level of firm pollution.And the relationship between the two roughly presents a U-shaped relationship under the action of the marketincentive environmental regulation threshold.However,it roughly presents an inverted N-shaped relationship under the action of the command-control environmental regulation threshold.Additionally,the group test results show that the existence of regional and ownership heterogeneity causes certain differences in the environmental behaviour of politically connected enterprises.These findings indicate that diverse environmental regulations are needed to promote sustainable green development and to further expand the theoretical and practical exploration of political connections on firm pollution.展开更多
Mergers and acquisitions （M＆A） are the important methods to quickly acquire external resources, achieve the economies of scale and the economies of scope, improve market share, and expand the scale of enterprise, w...Mergers and acquisitions （M＆A） are the important methods to quickly acquire external resources, achieve the economies of scale and the economies of scope, improve market share, and expand the scale of enterprise, while M＆A performance is an important index to measure if enterprise M＆A is successful. In this paper, the influence of entrepreneurs＇ political connection on the M＆A driving factors and M＆A efficiency of the enterprises with different property rights are analyzed using 357 mergers and acquisitions of China＇ s 189 listed companies in 2005-2011 as samples based on the distinction between political connection and the nature of enterprise property rights. The results show that the political connection plays a very significant positive influence on the M＆A performances of the central state-owned enterprises and private enterprises, but exerts a very significant negative influence on the local state-owned enterprises; the intensity of entrepreneurs＇ political connection also plays a certain influence on enterprise merger and acquisition, and the central political connection and the local political connection are significantly different in the influence on the enterprise M＆A performance.展开更多
We analyze data on Chinese non-state-listed firms and find that it is easier for firms with political connections to obtain long-term loans with extended debt maturities than it is for firms without political connecti...We analyze data on Chinese non-state-listed firms and find that it is easier for firms with political connections to obtain long-term loans with extended debt maturities than it is for firms without political connections. Our investigation indicates that this phenomenon is significantly less common with increased media monitoring. Houston et al.(2011) find strong evidence that the state ownership of media is associated with higher levels of bank corruption in China, but our study shows that, to a certain extent, media monitoring can curb corruption.展开更多
Vigorous anti-corruption campaigns launched by China since the 18 th CPC National Congress have produced an extensive impact on China's political and economic landscapes. From the micro-perspective of corporate in...Vigorous anti-corruption campaigns launched by China since the 18 th CPC National Congress have produced an extensive impact on China's political and economic landscapes. From the micro-perspective of corporate innovation, this paper investigates the effects of anti-corruption efforts on corporate behavior. This paper has found that seeking political connections and promoting innovation are mutually substitutable means of development for firms. Anti-corruption efforts have increased the costs for firms to seek political connections and thus raised the incentives for corporate innovation. After the launch of anti-corruption policies, the level of corporate innovation significantly increased. In particular, R&D spending increased significantly for firms previously with political connections. Anti-corruption efforts have promoted overall corporate innovation. This paper has also found that the effects of anti-corruption efforts on corporate innovation are heterogeneous at the provincial level. For firms previously with political connections in provinces with a high anti-corruption intensity, the level of innovation increased more significantly. Given the controversies concerning the effects of the recent round of anticorruption campaign on economic growth, this paper provides new evidence that anticorruption efforts are favorable to corporate innovation. Considering the endogenous problem, this paper has adopted the policy experiment of anti-corruption efforts after the 18 th CPC National Congress and the difference-in-differences(DID) technique.展开更多
We propose that independent directors are likely to play a political role in an institutional setting featuring weak investor protection and strong government intervention. Using Chinese data for 2001–2014, we invest...We propose that independent directors are likely to play a political role in an institutional setting featuring weak investor protection and strong government intervention. Using Chinese data for 2001–2014, we investigate whether the stock price reaction to an independent director's death is related to his or her political connection. We find a stronger negative reaction to the death announcements of politically connected than politically unconnected independent directors. The magnitude of the reaction is positively related to directors' political rank, and cannot be offset by their firms' political capital. However,we document no evidence of politically connected independent directors exhibiting superior monitoring or consulting performance. Additional analyses show that firms are more inclined to appoint a politically connected independent director as a successor if his or her predecessor also had political connections. Our study broadens scholarly understanding of independent directors' role in a non-Anglo-American setting.展开更多
This paper explores how the influences corporate donations, based on political identity of top managers upper echelons theory （UET）. The results show that the political identity of the top manager has a significant ...This paper explores how the influences corporate donations, based on political identity of top managers upper echelons theory （UET）. The results show that the political identity of the top manager has a significant impact on the donation behavior of a company, especially in areas with poor institutional environments. Corporate donations depend not only on whether the top manager has a political identity but also the type of this identity. Furthermore, the impact differs significantly between companies with different ownership structures. This study enriches our knowledge of corporate philanthropy by demonstrating that corporate donation practices are shaped by a range of contextual factors. Corporate giving behaviors in emerging economies such as China are differently motivated according to the fundamentally different aspects of their institutional settings.展开更多
We present a framework and empirical evidence to explain why,on average,11%of listed firms in China received modified audit opinions(MAOs)between 1992 and 2009.We argue that there are two reasons for this phenomenon:s...We present a framework and empirical evidence to explain why,on average,11%of listed firms in China received modified audit opinions(MAOs)between 1992 and 2009.We argue that there are two reasons for this phenomenon:strong earnings management incentives lower firms'financial reporting quality and soft budget constraints weaken the information and governance roles of audit opinions.We find that firms'financial constraints eased after receiving MAOs,which suggests that MAOs have limited economic consequences.Further analysis shows that this phenomenon predominantly exists in government-controlled firms and firms that receive MAOs for the first time.We also find that MAOs have not influenced financial constraints after 2006.Finally,we find that MAOs did not affect borrowing cash flows from banks until 2005,suggesting that MAOs did not start affecting bank financing until that year.We also find that firms receive more related-party financing after receiving MAOs.Our results indicate that a limited effect on bank financing and increased related-party financing reduce the effect of MAOs on financial constraints.展开更多
This study examines how the relationships between local governments and local enterprises moderate the effect of targeted monetary policies through different action-propagating mechanisms. First, we investigate the im...This study examines how the relationships between local governments and local enterprises moderate the effect of targeted monetary policies through different action-propagating mechanisms. First, we investigate the impact of monetary policies on enterprise investment in areas with different institutional environments. Second, we investigate the impact of monetary policies on stateowned enterprises(SOEs) with different property rights structures. Third, we examine how political connections can influence the action-propagating mechanism of monetary policies. We conclude that in China monetary policies have different effects on SOEs and on private enterprises with or without political connections. Specifically, local government interventions can significantly weaken and distort the effects of monetary policies, such that the intended reduction in investment is noticeably alleviated for SOEs and private enterprises with close links to local governments.展开更多
Using organizational flexibility as a research lens, we investigate how private firms, especially SMEs, in China cope with the 2008 financial crisis. Testing data from a large sample of private firms （N=3,459） by di...Using organizational flexibility as a research lens, we investigate how private firms, especially SMEs, in China cope with the 2008 financial crisis. Testing data from a large sample of private firms （N=3,459） by difference-indifferences analysis, we find that firms with industrial diversification, geographic expansion and political connections perform better during the crisis than those without. These results are less affected by self-selection problems （as the abrupt crisis provides a natural experiment） and hold up against endogeneity and several other challenges in robustness tests. The findings offer important implications for researchers, business owners, policy makers and future research.展开更多
In 2013,the Chinese government implemented Rule No.18,which suspended the directorships of incumbent government officials and precluded those who retired within the past three years from serving as independent directo...In 2013,the Chinese government implemented Rule No.18,which suspended the directorships of incumbent government officials and precluded those who retired within the past three years from serving as independent directors for listed firms.The surprise implementation of Rule No.18 triggered a wave of resignations among official independent directors(OIDs).The event provided a unique opportunity to examine the impacts of the political connections of board members on firm performance.We applied a difference-in-difference technique to empirically investigate the effect of OID resignations on firm performance from the perspectives of resource dependence theory and social capital theory.The results indicate that the resignation of OIDs had a significantly negative effect on firm performance,as measured by Tobin's 0 and firm leverage.This also confirmed the importance of independent directors'political connection on firm performance,as discovered in prior research.However,this influence varied across OIDs'heterogeneity,external environment and firm ownership.The results indicate that political connections may not be necessary channels for firms to achieve success.展开更多
In this study we conduct firm-level analysis of the impact of women in the boardroom on corporate philanthropic disaster response(CPDR).We propose that CPDR contains agency costs and that female directors are more lik...In this study we conduct firm-level analysis of the impact of women in the boardroom on corporate philanthropic disaster response(CPDR).We propose that CPDR contains agency costs and that female directors are more likely to restrain the associated agency costs of CPDR.We predict a negative relationship between the ratio of women on boards of directors(WoBs) and philanthropic contribution,which is weaker in firms with political connections and stronger in firms with better-developed institutional environments.Data was collected from the philanthropic responses to the Wenchuan earthquake on May 12,2008 of privately-owned listed Chinese firms.The results support the hypothesized negative relationship,which is found to be weaker in firms with political connections.However,marketization-related factors do not significantly moderate this relationship.These results indicate that CPDR contains agency costs and that female directors do not facilitate the corporate donation process,but rather evaluate the benefits and restrain the associated agency costs.展开更多
As the literature documents inconclusive evidence on whether tax avoidance affects CEO turnover,we examine the impact of tax avoidance on forced CEO turnover and the moderating effect of ownership structure,political ...As the literature documents inconclusive evidence on whether tax avoidance affects CEO turnover,we examine the impact of tax avoidance on forced CEO turnover and the moderating effect of ownership structure,political connections and regional tax enforcement on this relationship.Using data on Chinese listed firms involving 10,653 observations for the 2011–2018 period,we test our hypotheses using logistic regressions.We find that tax avoidance is positively associated with forced CEO turnover,suggesting that tax-avoiding firms are more likely to face leadership crises.Furthermore,the positive association is pronounced for firms that are state-owned,lack political connections or are located in developed regions with active tax enforcement.Our results,which are robust to alternative proxies and endogeneity tests,should interest policymakers and investors as they demonstrate the impact of tax avoidance on corporate governance and leadership.展开更多
基金This work was supported by National Natural Science Foundation of China[No.72091515]the Natural Science Fund of Hunan Province(2022JJ40647).
文摘Increasing attention has been focused on the extent to which corporate political connections influence the growing pollution due to the rapid growth in the popularity of firm pollution in developing countries.We adopt a static threshold regression model to investigate the effects of heterogeneous environmental regulation on political connections and firm pollution based on the panel data from China’s A-share listed companies from 2012 to 2019.The empirical results show a non-linear relationship between the degree of political connection of listed company executives and the level of firm pollution.And the relationship between the two roughly presents a U-shaped relationship under the action of the marketincentive environmental regulation threshold.However,it roughly presents an inverted N-shaped relationship under the action of the command-control environmental regulation threshold.Additionally,the group test results show that the existence of regional and ownership heterogeneity causes certain differences in the environmental behaviour of politically connected enterprises.These findings indicate that diverse environmental regulations are needed to promote sustainable green development and to further expand the theoretical and practical exploration of political connections on firm pollution.
文摘Mergers and acquisitions （M＆A） are the important methods to quickly acquire external resources, achieve the economies of scale and the economies of scope, improve market share, and expand the scale of enterprise, while M＆A performance is an important index to measure if enterprise M＆A is successful. In this paper, the influence of entrepreneurs＇ political connection on the M＆A driving factors and M＆A efficiency of the enterprises with different property rights are analyzed using 357 mergers and acquisitions of China＇ s 189 listed companies in 2005-2011 as samples based on the distinction between political connection and the nature of enterprise property rights. The results show that the political connection plays a very significant positive influence on the M＆A performances of the central state-owned enterprises and private enterprises, but exerts a very significant negative influence on the local state-owned enterprises; the intensity of entrepreneurs＇ political connection also plays a certain influence on enterprise merger and acquisition, and the central political connection and the local political connection are significantly different in the influence on the enterprise M＆A performance.
基金supported by the Major Project of the National Natural Science Foundation of China(Nos.71372168,71002110,71132004 and 71332004)
文摘We analyze data on Chinese non-state-listed firms and find that it is easier for firms with political connections to obtain long-term loans with extended debt maturities than it is for firms without political connections. Our investigation indicates that this phenomenon is significantly less common with increased media monitoring. Houston et al.(2011) find strong evidence that the state ownership of media is associated with higher levels of bank corruption in China, but our study shows that, to a certain extent, media monitoring can curb corruption.
基金the financial support provided by the Outstanding Innovative Talents Cultivation Funded Programs 2015 of Renmin University of China
文摘Vigorous anti-corruption campaigns launched by China since the 18 th CPC National Congress have produced an extensive impact on China's political and economic landscapes. From the micro-perspective of corporate innovation, this paper investigates the effects of anti-corruption efforts on corporate behavior. This paper has found that seeking political connections and promoting innovation are mutually substitutable means of development for firms. Anti-corruption efforts have increased the costs for firms to seek political connections and thus raised the incentives for corporate innovation. After the launch of anti-corruption policies, the level of corporate innovation significantly increased. In particular, R&D spending increased significantly for firms previously with political connections. Anti-corruption efforts have promoted overall corporate innovation. This paper has also found that the effects of anti-corruption efforts on corporate innovation are heterogeneous at the provincial level. For firms previously with political connections in provinces with a high anti-corruption intensity, the level of innovation increased more significantly. Given the controversies concerning the effects of the recent round of anticorruption campaign on economic growth, this paper provides new evidence that anticorruption efforts are favorable to corporate innovation. Considering the endogenous problem, this paper has adopted the policy experiment of anti-corruption efforts after the 18 th CPC National Congress and the difference-in-differences(DID) technique.
基金National Natural Science Foundation of China (Nos.71302105,71372041,and 71572100)MOE Project for Key Research Institutes of Humanities and Social Science (No.13JJD790019)MOE Foundation for Humanities and Social Science (No.13YJA790057)
文摘We propose that independent directors are likely to play a political role in an institutional setting featuring weak investor protection and strong government intervention. Using Chinese data for 2001–2014, we investigate whether the stock price reaction to an independent director's death is related to his or her political connection. We find a stronger negative reaction to the death announcements of politically connected than politically unconnected independent directors. The magnitude of the reaction is positively related to directors' political rank, and cannot be offset by their firms' political capital. However,we document no evidence of politically connected independent directors exhibiting superior monitoring or consulting performance. Additional analyses show that firms are more inclined to appoint a politically connected independent director as a successor if his or her predecessor also had political connections. Our study broadens scholarly understanding of independent directors' role in a non-Anglo-American setting.
基金Acknowledgements We thank the editor and two anonymous reviewers for their many insightful and constructive suggestions. This work was supported by the National Natural Science Foundation of China （71372166, 71502174） and the Research Base on Low-carbon Economy for Guangzhou Area.
文摘This paper explores how the influences corporate donations, based on political identity of top managers upper echelons theory （UET）. The results show that the political identity of the top manager has a significant impact on the donation behavior of a company, especially in areas with poor institutional environments. Corporate donations depend not only on whether the top manager has a political identity but also the type of this identity. Furthermore, the impact differs significantly between companies with different ownership structures. This study enriches our knowledge of corporate philanthropy by demonstrating that corporate donation practices are shaped by a range of contextual factors. Corporate giving behaviors in emerging economies such as China are differently motivated according to the fundamentally different aspects of their institutional settings.
基金supported by the National Natural Science Foundation of China(No.71172143)the Major Project of Key Research Institute of Humanities and Social Science of the Ministry of Education,People's Republic of China(No.2009JJD790030)
文摘We present a framework and empirical evidence to explain why,on average,11%of listed firms in China received modified audit opinions(MAOs)between 1992 and 2009.We argue that there are two reasons for this phenomenon:strong earnings management incentives lower firms'financial reporting quality and soft budget constraints weaken the information and governance roles of audit opinions.We find that firms'financial constraints eased after receiving MAOs,which suggests that MAOs have limited economic consequences.Further analysis shows that this phenomenon predominantly exists in government-controlled firms and firms that receive MAOs for the first time.We also find that MAOs have not influenced financial constraints after 2006.Finally,we find that MAOs did not affect borrowing cash flows from banks until 2005,suggesting that MAOs did not start affecting bank financing until that year.We also find that firms receive more related-party financing after receiving MAOs.Our results indicate that a limited effect on bank financing and increased related-party financing reduce the effect of MAOs on financial constraints.
基金support from the Beijing Social Science Fund(16YJC041)financial support from the National Natural Science Foundation of China(Grant Nos.71372137 and 71232004),financial support from the National Natural Science Foundation of China(Grant No.71372050)
文摘This study examines how the relationships between local governments and local enterprises moderate the effect of targeted monetary policies through different action-propagating mechanisms. First, we investigate the impact of monetary policies on enterprise investment in areas with different institutional environments. Second, we investigate the impact of monetary policies on stateowned enterprises(SOEs) with different property rights structures. Third, we examine how political connections can influence the action-propagating mechanism of monetary policies. We conclude that in China monetary policies have different effects on SOEs and on private enterprises with or without political connections. Specifically, local government interventions can significantly weaken and distort the effects of monetary policies, such that the intended reduction in investment is noticeably alleviated for SOEs and private enterprises with close links to local governments.
文摘Using organizational flexibility as a research lens, we investigate how private firms, especially SMEs, in China cope with the 2008 financial crisis. Testing data from a large sample of private firms （N=3,459） by difference-indifferences analysis, we find that firms with industrial diversification, geographic expansion and political connections perform better during the crisis than those without. These results are less affected by self-selection problems （as the abrupt crisis provides a natural experiment） and hold up against endogeneity and several other challenges in robustness tests. The findings offer important implications for researchers, business owners, policy makers and future research.
文摘In 2013,the Chinese government implemented Rule No.18,which suspended the directorships of incumbent government officials and precluded those who retired within the past three years from serving as independent directors for listed firms.The surprise implementation of Rule No.18 triggered a wave of resignations among official independent directors(OIDs).The event provided a unique opportunity to examine the impacts of the political connections of board members on firm performance.We applied a difference-in-difference technique to empirically investigate the effect of OID resignations on firm performance from the perspectives of resource dependence theory and social capital theory.The results indicate that the resignation of OIDs had a significantly negative effect on firm performance,as measured by Tobin's 0 and firm leverage.This also confirmed the importance of independent directors'political connection on firm performance,as discovered in prior research.However,this influence varied across OIDs'heterogeneity,external environment and firm ownership.The results indicate that political connections may not be necessary channels for firms to achieve success.
基金funded by grants from the National Natural Science Foundation of China(Nos.71002049and 70902066)the New Teacher Fund of the Chinese Ministry of Education(Nos.20106102120055 and20090201120038)+1 种基金the Social Science Promotion Program at Northwestern Polytechnical Universitythe New Teacher Support Program and President's Fund at Xi'an Jiaotong University
文摘In this study we conduct firm-level analysis of the impact of women in the boardroom on corporate philanthropic disaster response(CPDR).We propose that CPDR contains agency costs and that female directors are more likely to restrain the associated agency costs of CPDR.We predict a negative relationship between the ratio of women on boards of directors(WoBs) and philanthropic contribution,which is weaker in firms with political connections and stronger in firms with better-developed institutional environments.Data was collected from the philanthropic responses to the Wenchuan earthquake on May 12,2008 of privately-owned listed Chinese firms.The results support the hypothesized negative relationship,which is found to be weaker in firms with political connections.However,marketization-related factors do not significantly moderate this relationship.These results indicate that CPDR contains agency costs and that female directors do not facilitate the corporate donation process,but rather evaluate the benefits and restrain the associated agency costs.
文摘As the literature documents inconclusive evidence on whether tax avoidance affects CEO turnover,we examine the impact of tax avoidance on forced CEO turnover and the moderating effect of ownership structure,political connections and regional tax enforcement on this relationship.Using data on Chinese listed firms involving 10,653 observations for the 2011–2018 period,we test our hypotheses using logistic regressions.We find that tax avoidance is positively associated with forced CEO turnover,suggesting that tax-avoiding firms are more likely to face leadership crises.Furthermore,the positive association is pronounced for firms that are state-owned,lack political connections or are located in developed regions with active tax enforcement.Our results,which are robust to alternative proxies and endogeneity tests,should interest policymakers and investors as they demonstrate the impact of tax avoidance on corporate governance and leadership.
