Political control, corporate governance and stock-price crash risk: Evidence from China

Ziyao San, Shuai Wang, Zongfeng Xiu, Ling Zhou and Zejiang Zhou

Emerging Markets Review, 2025, vol. 65, issue C

Abstract: We find that Chinese state-owned enterprise (SOEs) with Disciplinary Commission members on the board experience lower stock price crash risk than their counterparts. This effect is less pronounced for SOEs with more shares held by non-state large shareholders. The results are robust after addressing potential endogeneity issues related to the appointment of the board of directors. Additional analysis suggests that the inclusion of Disciplinary Commission members on the board of directors reduces crash risk by mitigating agency costs, curtailing overinvestment, and improving financial reporting transparency. Collectively, our findings support the notion that the presence of Disciplinary Commission members on the board of directors strengthens the governance of SOEs.

Keywords: Corporate governance; Stock price crash risk; Board director; State-owned enterprises (SOE); The impact of politics; Communist Party of China; Disciplinary commission (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1566014125000093
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:ememar:v:65:y:2025:i:c:s1566014125000093

DOI: 10.1016/j.ememar.2025.101260

Access Statistics for this article

Emerging Markets Review is currently edited by Jonathan A. Batten

More articles in Emerging Markets Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().