Chinese Firms’ Political Connection, Ownership, and Financing Constraints

Yan, Isabel K. and Chan, Kenneth S. and Dang, Vinh Q.T. (2011): Chinese Firms’ Political Connection, Ownership, and Financing Constraints. Forthcoming in: Economics Letters

Abstract

We empirically examine some listed Chinese firms’ political connection, ownership, and financing constraints. Politically-connected firms display no financing constraints whereas firms without connection experience significant constraints. Non-connected family-controlled firms bear greater constraints than non-connected state-owned firms.

• Item Type: MPRA Paper
• Language: English
• Keywords: Political connection; investments; financing constraints; Chinese firms
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting ; Fixed Investment and Inventory Studies ; Capacity; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance

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