Berkman, Henk and Cole, Rebel and Fu, Lawrence (2010): Political connections and minority-shareholder protection: Evidence from securities-market regulation in China. Published in: Journal of Financial and Quantiative Analysis , Vol. 6, No. 45 (1. December 2010): pp. 1391-1417.
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We examine the wealth effects of three regulatory changes designed to improve minority-shareholder 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
|Item Type:||MPRA Paper|
|Original Title:||Political connections and minority-shareholder protection: Evidence from securities-market regulation in China|
|Keywords:||China; convergence; enforcement; expropriation; political connections; investor protection; minority shareholder; regulation; tunneling|
|Subjects:||G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation
G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
|Depositing User:||Prof. Rebel Cole|
|Date Deposited:||22. Mar 2011 13:52|
|Last Modified:||15. Feb 2013 10:20|
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Available Versions of this Item
Political connections and minority-shareholder protection: Evidence from securities-market regulation in China. (deposited 04. Apr 2008 06:25)
- Political connections and minority-shareholder protection: Evidence from securities-market regulation in China. (deposited 22. Mar 2011 13:52) [Currently Displayed]