Political Connections and Government Subsidies: Evidence from Financially Distressed Firms in China

Qizhi Tao    Qizhi Tao, Yicheng Sun, Yingjun Zhu, Xiaolin Yang
16 Aug 2017
Category: Corporate Finance

Country or region: China

Previous studies report mixed evidence regarding the effect of political connections on firmvalue. We seek new evidence in China, an important emerging market with a hallmark of a relationship-based economy. Using financially distressed firms (special treatment or ST firms) as a unique sample, we identify a direct channel through which political connections enhance ......

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