Political association, managerial power heterogeneity, and corporate risk-taking in China

Bin-Feng Chai and Sultan Sikandar Mirza

Economic Research-Ekonomska Istraživanja, 2019, vol. 32, issue 1, 1373-1393

Abstract: This article investigates the impact of political association and managerial power heterogeneity on corporate risk-taking using data of listed companies in China from 2006 to 2015. Politically associated companies demonstrate higher corporate risk-taking, and the impact of managerial power thereon depends on the source thereof. Structurally speaking, board of directors’ supervision, and shareholders’ supervision power are positively associated with corporate risk-taking, but ownership, expert, and prestige power are negatively associated. Political association weakens the influence of structural and prestige power on corporate risk-taking and strengthens the impact of ownership and expert power thereon. The article adds to the literature on political association, managerial power, and corporate risk-taking.

Date: 2019
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DOI: 10.1080/1331677X.2019.1634613

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