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ABSTRACT Taking advantage of the SOEs privatization events in China, our research looks to identify the causal effect of political connections on corporate financial constraints. In a difference-in-differences framework, we… Click to show full abstract
ABSTRACT Taking advantage of the SOEs privatization events in China, our research looks to identify the causal effect of political connections on corporate financial constraints. In a difference-in-differences framework, we demonstrate that after the transfer of control from state to private owners, privatized SOEs hoard more cash, save more cash from incremental cash flow, and exhibit higher cash flow sensitivity of investment.
Keywords:
political connections;
financial constraints;
effect political;
connections corporate;
privatization;
corporate financial
Journal Title: Applied Economics Letters
Year Published: 2019
Link to full text (if available)
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Journal Title: Applied Economics Letters
Year Published: 2019
Link to full text (if available)
Share on Social Media: Sign Up to like & get
recommendations!