Political connections, institutional environment and informativeness of stock price

Tao Xie and Yanan Li

Finance Research Letters, 2023, vol. 55, issue PA

Abstract: This study empirically investigates how political connections affect the information content of stock prices. We find that political connections increase stock price synchronicity; political connections in the category of government officials significantly increase stock price synchronicity; political connections in the category of industrial and commercial associations significantly decrease stock price synchronicity; the relationship between political connections in the category of NPC deputies and CPPCC members and stock price synchronicity is not significant; political connections in the category of NPC deputies and CPPCC members significantly increase stock price synchronicity in the case of direct listing.

Keywords: Private enterprises; Political affiliation; Stock price synchronization (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002647

DOI: 10.1016/j.frl.2023.103892

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