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Doctor of Philosophy, (Finance)
Study Completed: 2017
Massey Business School
The Impact of Political Connections on Chinese Listed Firms
Ms Chen investigated the impact of a new type of 'princeling' (a relative of top leaders’ families or other high-ranking public officials at the provincial level) political connection on Chinese listed companies from 1992 to 2011. Three specific issues are examined through three interconnected essays: Characteristics of 'princeling' politically connected firms (PCFs) with respect to accounting numbers in financial statements and corporate governance; the expropriation on earnings by PCFs; and the impact of political connections on stock returns. Her research found that PCFs systematically perform differently from their counter peers in terms of accounting ratios drawn from three financial statements, governance, and board composition. Furthermore, by using a theoretical approach that combines agency theory and accounting principles, her research sheds light on how PCFs expropriate minority shareholders during profit distributions on the Chinese stock market. In addition, evidence was presented that stock market price reacts positively to a 'princeling' connection.
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Last updated on Tuesday 04 April 2017