Does politician turnover foster firm risk-taking? The moderating role of political ties heterogeneity

Fei Tang () and Lu Zhang ()
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Fei Tang: Guizhou University
Lu Zhang: Hunan First Normal University

Quality & Quantity: International Journal of Methodology, 2024, vol. 58, issue 2, No 14, 1279-1301

Abstract: Abstract Many studies have addressed the issues of political risk while these studies have given scarce attention to politician turnover. This study thus draws from environmental uncertainty theory to explore the main issues that whether and how politician turnover affects firm risk-taking. The samples of this study are the publicly listed Chinese firms from the period of 2008–2016, and this study utilized the Generalized Estimate Equation tool for the hypothesis test. The results show that: (1) politician turnover has a significantly positive effect on firm risk-taking, that is, when firms are present in the context of politician turnover, their risk-taking tend to become stronger; (2) political ties enhance this positive effect; that is, both state ownership ties and managerial political ties positively moderate the positive effect of politician turnover on firms’ risk-taking. The findings of the study contribute new insights to the literature on politician turnover and benefit firms in dealing with political risk.

Keywords: Environmental uncertainty theory; Politician turnover; Firm risk-taking; State ownership ties; Managerial political ties (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11135-023-01693-w

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