Corruption Charges Against Executives and Stock Value of Chinese State Owned Enterprises
Kam Ki Tang and
Haishan Yuan
No 555, Discussion Papers Series from University of Queensland, School of Economics
Abstract:
This paper examines whether the removal of politically connected executives from their positions will have any impacts, positive or negative, on their firms’ stock values. It focuses on the prosecution of executives of state owned enterprises in China during the anti-corruption campaign since 2013. Using the event study approach and the Fama-French three factor model, we analyze how announcements of prosecutions, which are expected to eventually result in the removal of the executives in question, affect the market returns of the affiliated firms over a 15-day window surrounding the announce- ments. A number of robustness tests are conducted. All empirical results suggest that the stock value of firms did not react to the news announcements. A number of possible explanations for this finding are offered.
Keywords: Anti-corruption; Stock Value; Political Connections; Entrenched Executives; China (search for similar items in EconPapers)
JEL-codes: F13 F35 F6 (search for similar items in EconPapers)
Date: 2016-02-01
New Economics Papers: this item is included in nep-cna
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:555
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