Mitigating firm-level political risk in China: The role of multiple large shareholders
Liang Wang
Economics Letters, 2023, vol. 222, issue C
Abstract:
We adopt text-based tools to construct a new measurement of the firm-level political risk (FPR) faced by individual Chinese listed firms: the share of management discussion and analysis (MD&A) they have allocated to political risks. We investigate the effect of multiple large shareholders (MLS) on FPR and find that MLS exert a negative effect on FPR. These results hold after addressing endogeneity. We therefore link MLS to FPR, providing insights into mitigating firms’ political risk in China by capturing the wide variation in actual and perceived political risk across firms and over time.
Keywords: Firm-level political risk; Chinese listed firms; Multiple large shareholders; Ownership structure; Textual analysis; Management discussion and analysis (search for similar items in EconPapers)
JEL-codes: G12 G14 G34 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (7)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:222:y:2023:i:c:s0165176522004347
DOI: 10.1016/j.econlet.2022.110960
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