Mixing Business with Politics: Political Participation by Entrepreneurs in China

Xunan Feng, Anders Johansson and Tianyu Zhang
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Tianyu Zhang: Chinese University of Hong Kong

No 2013-28, Stockholm School of Economics Asia Working Paper Series from Stockholm School of Economics, Stockholm China Economic Research Institute

Abstract: We study how Chinese private entrepreneurs benefit from participating in politics. Using original hand-collected data on listed firms controlled by private entrepreneurs, we document a significant positive relationship between political participation and change in firm performance. We also provide evidence that the change in social status cannot explain the change in performance. We then identify several ways through which firms gain preferential treatment when the controlling entrepreneur participates in politics: better access to debt financing, preferential tax treatment, more government subsidies, and superior access to regulated industries.

Keywords: Political participation; Entrepreneurs; Corporate governance; Rent seeking; Debt financing; Tax burden; Government subsidies; Mergers and acquisitions; Regulated industries; China (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 H20 P26 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2013-12-17
New Economics Papers: this item is included in nep-cdm, nep-cfn, nep-ent, nep-pol and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Mixing business with politics: Political participation by entrepreneurs in China (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hascer:2013-028

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