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Asia Pacific Journal of Management
Erschienen in: Asia Pacific Journal of Management 4/2013

01.12.2013

The contingent value of CEO political connections: A study on IPO performance in China

verfasst von: Jianfeng Wu, Sali Li, Zijie Li

Erschienen in: Asia Pacific Journal of Management | Ausgabe 4/2013

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Abstract

This study investigates the effect of corporate political connections on IPO performance in an emerging economy. More specifically, it examines how CEO political connections affect the IPO performance of 428 firms in China from 2000 to 2004. The empirical results show that CEO political connections have a positive impact on firms’ ability to raise capital from public markets. The results also show that CEO political connections with the central government play a more important role in IPO performance than political connections with regional governments. In addition, the positive effect of central political connections on IPO performance is weaker in market-restricted regions but stronger in highly regulated industries. The findings highlight the contingent value of CEO political connections in an emerging economy.
Vorheriger Artikel Board turnover in Taiwan’s public firms: An empirical study
Nächster Artikel Breaking institutionalized corruption: Is the experience of the Hong Kong Independent Commission Against Corruption generalizable?

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Fußnoten
1
Although research has also included implicit political connections as part of corporate political connections, such as familial relationships, personal networks with politicians (Peng & Luo, 2000), and corporate political networking activities (Li & Zhang, 2007), the current study focuses on explicit political connections (i.e., top executives’ prior work experiences in the government). The advantages of focusing on explicit political connections are twofold. First, explicit political connections are more straightforward and objective than informal connections (Hillman, 2005). Second, only explicit political connections are reported in IPO prospectuses. Therefore, only they can serve as prominent signals to public investors about the IPO firm’s political connections.
 
2
We thank an anonymous reviewer for this comment.
 
3
The results, which are not shown here, are available from the corresponding author on request.
 
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Metadaten
Titel
The contingent value of CEO political connections: A study on IPO performance in China
verfasst von
Jianfeng Wu
Sali Li
Zijie Li
Publikationsdatum
01.12.2013
Verlag
Springer US
Erschienen in
Asia Pacific Journal of Management / Ausgabe 4/2013
Print ISSN: 0217-4561
Elektronische ISSN: 1572-9958
DOI
https://doi.org/10.1007/s10490-012-9300-1

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