 Political connections and firm performance: Evidence from government officials' site visitsYizhong Wang, Chengxue Yao and Di Kang Pacific-Basin Finance Journal, 2019, vol. 57, issue C Abstract: This study uses government officials' corporate site visits as a measurement of political connection and examines how political connection affects firm performance. Using a novel dataset on government officials' site visits from 2004 to 2014, we find that firm performance increases following corporate site visits by government officials. This study finds that firms obtain more new investment projects and bank loans, improve corporate governance, and decrease information asymmetry as well. Government officials' site visits are also associated with positive abnormal stock returns, indicating that investors interpret government officials' site visits as a signal of government endorsement and support. Using China's recent anti-corruption campaign as an exogenous shock, we find that political connections are more valuable in the absence of political corruption. Keywords: Officials' site visit; Political connection; Firm value (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:57:y:2019:i:c:s0927538x18301136 DOI: 10.1016/j.pacfin.2018.05.003 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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