Political Turnover and the Stock Performance of SOEs in China

Danli Wang and Terence Tai Leung Chong

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyses the reasons behind the long-term underperformance of China's stock market. We argue that the price growth of local state-owned enterprises (SOEs) is hindered by the control of state shares by local cadres, who often sell the shares below market prices during their time in office. Our empirical analysis reveals that political turnover of prefectural Party Secretary has a significantly negative impact on the selling of state-owned shares and the price growth of local state-owned enterprises, while there is no such impact on private enterprises and state-owned enterprises controlled by the central government.

Keywords: Political turnover; State-owned enterprises; Local cadres. (search for similar items in EconPapers)
JEL-codes: G1 O1 P2 (search for similar items in EconPapers)
Date: 2015-11-05
New Economics Papers: this item is included in nep-cna and nep-pol
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Related works:
Journal Article: Political Turnover and the Stock Performance of SOEs in China (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:68459

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