Political connection and corporate senior-care investment: Active investment or passive involvement?

Bin Meng, Zhipeng Lin, Tao Liu and Baofeng Shi

Finance Research Letters, 2024, vol. 67, issue PA

Abstract: This study investigates the impact of political connections on the willingness of Chinese listed companies to invest in senior care using data collected between 2019 and 2021, contextualized within China's rapid transition to an “aged” and “super-aged” society. Utilizing empirical data, this research explores how political ties, media attention, and the nature of enterprise ownership influence corporate investment behaviors in the senior-care sector. Key findings indicate that political connections positively correlate with increased investment, driven by both proactive alignment with government policies and reactive compliance under government pressure. Conversely, heightened media scrutiny can dampen investment willingness, possibly due to reputational concerns. Furthermore, state-owned enterprises exhibit a stronger propensity toward senior-care investment compared with private firms. This analysis highlights the complex interplay between corporate governance, social responsibilities, and external influences, suggesting that both policymakers and companies must consider these dynamics to foster meaningful contributions to the senior-care sector. These results enhance the understanding of corporate behavior in the face of demographic challenges while contributing to the broader discourse on corporate social responsibility.

Keywords: Corporate senior-care investment; Political connection; Corporate social responsibility; Media attention (search for similar items in EconPapers)
JEL-codes: G38 H55 M14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pa:s1544612324007724

DOI: 10.1016/j.frl.2024.105742

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