Political affiliation, cash flow volatility, and debt maturity in China

Mustafa Caglayan, Simona Mateut and Piercarlo Zanchettin

The British Accounting Review, 2024, vol. 56, issue 5

Abstract: Using a large dataset with over half a million observations for 161 thousand Chinese firms, we examine the role of political affiliation on the debt maturity of firms experiencing varying levels of financial volatility. Our findings indicate that politically affiliated firms have reduced capacity to adjust their debt maturity when firm-specific risk rises. Furthermore, we demonstrate that this effect is stronger for firms affiliated with local levels of government relative to central levels. We argue that political affiliation can play a disciplining role in environments where credit is controlled by the state and politicians’ careers depend on local economic performance.

Keywords: Debt maturity; Political affiliation; Cash flow volatility; Panel fractional response regression; Political connections (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0890838923001610
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:56:y:2024:i:5:s0890838923001610

DOI: 10.1016/j.bar.2023.101299

Access Statistics for this article

The British Accounting Review is currently edited by Nathan Lael Joseph and Alan Lowe

More articles in The British Accounting Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().