Government protection, political connection and management turnover in China

Louis T.W. Cheng and T.Y. Leung

International Review of Economics & Finance, 2016, vol. 45, issue C, 160-176

Abstract: Mainland Chinese government employs two related strategies to protect its national and economic interests in the process of financial liberalization. It grants government protection to industries of national interest. In addition, it also maintains political-linkage with certain firms to assert their influence. We term these firms as strategic firms. We argue these strategic firms with economic and national interests demonstrate better performance and higher management turnovers. Management turnovers are less frequent if the chairpersons and CEOs are politically-connected. The strategic firms also rebound better from financial distress than non-strategic firms.

Keywords: Political connection; Government protection; Management turnover; Strategic firm (search for similar items in EconPapers)
JEL-codes: G32 G34 G38 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056016300454
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:reveco:v:45:y:2016:i:c:p:160-176

DOI: 10.1016/j.iref.2016.03.010

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().