Does political turnover affect corporate investment? Evidence from China

Yanyan Chen

Emerging Markets Review, 2022, vol. 51, issue PA

Abstract: This paper adopts the dual perspectives of party/government officials and provincial/city officials to study the effect of political turnover on corporate investment in China. This paper finds that the turnover of both provincial party secretaries and city party secretaries inhibit corporate investment, while the turnover of governors and mayors have no effect on corporate investment. Investment irreversibility, not financial friction, is the mechanism through which local party secretaries' turnover reduces corporate investment. Moreover, ownership structure, the ultimate controller's hierarchy level, and the city's hierarchy level play moderating roles. The effects of provincial secretaries' turnover are more robust than those of city secretaries' turnover in additional tests and robustness checks.

Keywords: Provincial party secretaries' turnover; City party secretaries' turnover; Governors' turnover; Mayors' turnover; Corporate investment (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S156601412100073X
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:51:y:2022:i:pa:s156601412100073x

DOI: 10.1016/j.ememar.2021.100865

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 ().