Do political connections affect stock price crash risk? Firm-level evidence from China

被引：88

作者：

Lee W. ^{[1
]}

Wang L. ^{[2
]}

机构：

[1] Nanyang Business School, Nanyang Technological University, Singapore

[2] Institute for Financial and Accounting Studies, Xiamen University, Siming Nanlu 422, Xiamen

来源：

Review of Quantitative Finance and Accounting | 2017年 / 48卷 / 3期

基金：

中国国家自然科学基金;

关键词：

Crash risk; Financial opacity; Ownership; Political connection; Quality of institutions;

D O I：

10.1007/s11156-016-0563-3

中图分类号：

学科分类号：

摘要：

Using a sample of Chinese listed firms in the period from 2003 to 2012, this paper empirically investigates how the presence of politically connected directors affects stock price crash risk. We thereby make a distinction between listed state-controlled firms and privately controlled firms due to their different incentives to appoint politicians as directors on the board. Our empirical results show that politically connected directors exacerbate stock price crash risk in listed state-controlled firms, an effect driven by the appointment of local government officials as directors. In contrast, hiring politicians as directors, particularly central-government-affiliated directors, helps listed privately controlled firms to reduce stock price crash risk. Finally, good quality of institutions does not help to alleviate the positive relationship between political connections and stock price crash risk in listed state-controlled firms. However, it does weaken the role of political connections in reducing crash risk in listed privately controlled firms. © 2016, Springer Science+Business Media New York.

引用

页码：643 / 676

页数：33

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