TY - JOUR
T1 - Government protection, political connection and management turnover in China
AU - Cheng, Louis T.W.
AU - Leung, T. Y.
N1 - Funding Information:
The authors acknowledge that this research project was financially supported by the Research Grants Council of the Hong Kong Special Administrative Region, China (Hong Kong Polytechnic University Project No. PolyU1471/11H ). We thank Professor Michael Firth for his valuable comments.
Publisher Copyright:
© 2016 Elsevier Inc.
PY - 2016/9/1
Y1 - 2016/9/1
N2 - Mainland Chinese government employs two related strategies to protect its national and economic interests in the process of financial liberalization. It grants government protection to industries of national interest. In addition, it also maintains political-linkage with certain firms to assert their influence. We term these firms as strategic firms. We argue these strategic firms with economic and national interests demonstrate better performance and higher management turnovers. Management turnovers are less frequent if the chairpersons and CEOs are politically-connected. The strategic firms also rebound better from financial distress than non-strategic firms.
AB - Mainland Chinese government employs two related strategies to protect its national and economic interests in the process of financial liberalization. It grants government protection to industries of national interest. In addition, it also maintains political-linkage with certain firms to assert their influence. We term these firms as strategic firms. We argue these strategic firms with economic and national interests demonstrate better performance and higher management turnovers. Management turnovers are less frequent if the chairpersons and CEOs are politically-connected. The strategic firms also rebound better from financial distress than non-strategic firms.
KW - Government protection
KW - Management turnover
KW - Political connection
KW - Strategic firm
UR - https://www.scopus.com/pages/publications/84973327134
U2 - 10.1016/j.iref.2016.03.010
DO - 10.1016/j.iref.2016.03.010
M3 - Article
AN - SCOPUS:84973327134
SN - 1059-0560
VL - 45
SP - 160
EP - 176
JO - International Review of Economics and Finance
JF - International Review of Economics and Finance
ER -