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Survive Or Die? An Empirical Study On Chinese St Firms, Yanran-Annie Zhou, Maria H. Kim, Shiguang Ma
Survive Or Die? An Empirical Study On Chinese St Firms, Yanran-Annie Zhou, Maria H. Kim, Shiguang Ma
Faculty of Business - Papers (Archive)
A number of listed firms that are experiencing financial distress have had a Special Treatment (ST) 'cap' imposed on them by the China Securities Regulatory Commission. The ST 'cap' can be removed if the firms survive financial distress by becoming profitable. Alternatively, a ST firm which goes bankrupt is delisted from the market. Using a sample of 441 ST firms tracked from 1998 to 2011, this paper employs Cox's proportional hazards model to predict turnaround probability for a distressed firm to remove the ST 'cap'. The predictor variables incorporate: (1) accounting-driven ratios, (2) market-driven variables, and (3) information on ownership …
Political Connection, Founder-Manager And Their Impact On Tunneling In China's Listed Firms, Liangbo Ma, Shiguang Ma, Gary G. Tian
Political Connection, Founder-Manager And Their Impact On Tunneling In China's Listed Firms, Liangbo Ma, Shiguang Ma, Gary G. Tian
Faculty of Business - Papers (Archive)
Reciprocal relationship, often regarded as mutually beneficial and secure, can actually be destructive and result in inefficiency. We provide evidence of such double-blade by studying the impact of political connection on corporate governance. Private firms in countries where the government controls the allocation of resources have incentives to seek political connections by hiring politicians or ex-politicians as top executives. Such political capital, however, may turn into political constraint when the CEOs fail to perform but use connections to entrench themselves. We take advantage of the unique setting in China to illustrate this argument. We show that politically connected CEOs have …
The Stock Market Implication Of Political Connections: Evidence From Firms' Dividend Policy, Jerry Cao, Sheng Huang, Qigui Liu, Gary G. Tian
The Stock Market Implication Of Political Connections: Evidence From Firms' Dividend Policy, Jerry Cao, Sheng Huang, Qigui Liu, Gary G. Tian
Faculty of Business - Papers (Archive)
Political connections are valuable for shareholders of privately-run firms especially in countries with weak legal institutions. We study the effect of a firm's political connections in the public equity market by focusing on its impact on the firms' dividend policy. Prior studies suggest that dividends signal the commitment for proper treatment of minority shareholders and thus high growth firms pay dividends to establish such a reputation for better access to equity market in the future. Using a sample of privately-owned Chinese firms, we find that politically connected firms are less likely to pay dividends and pay less if they pay. …