Political connections and privatization: Evidence from China

Tu, Guoqian; Lin, Bingxuan; Feng, Liu

doi:10.1016/j.jaccpubpol.2012.10.002

Cited by 72 publications

(54 citation statements)

References 56 publications

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“…The result also agreed with Campbell and Minguez-Vera (2007) that found gender positively related to firm value. The negative result reported between political connection and firm performance is in line with the study of Tu, Lin and Liu (2013) that investigated how privatised firms were acquired by politically connected persons and how the firms behaved after their acquisition. The study showed that such firms received preferential treatment and faced post privatization tunnelling, which lead to dwindling performance after privatization.…”

Section: Discussion Of Findingssupporting

confidence: 80%

Political Connection, Board Characteristics and Firm Performance in Nigeria

Che-Adam¹,

Ahmad²,

Osazuwa³

2016

European Proceedings of Social &Amp; Behavioural Sciences

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This study examines the relationship between political connection, board characteristics and firm performance in Nigerian quoted firms. The model of the study is built based on the agency theory. It utilises a cross-sectional data of 116 firms for the year 2013, obtained from the annual reports of the firms. The robust corrected standard error regression was used in estimating the model. The study provides partial support for the proposition of the agency theory. The study finds board gender positively related to firm performance, while political connections and CEO incentives were negatively related with firm performance. The findings of this study should interest organisational stakeholders. Particularly, the negative association of political connection with firm performance has implication for auditors, shareholders and management. Furthermore, the study recommends more females to be considered into directorship positions, since they play a significant role in shaping the transparency of the board for better performance.

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Section: Discussion Of Findingssupporting

confidence: 80%

Political Connection, Board Characteristics and Firm Performance in Nigeria

Che-Adam¹,

Ahmad²,

Osazuwa³

2016

European Proceedings of Social &Amp; Behavioural Sciences

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“…Consequently, close political connections may help these acquirers to secure more favourable deals. Tu, Lin, and Liu (2013) find that politically connected private acquirers receive preferential treatment and acquire higher quality firms during full privatisation but tend to tunnel a firm after acquisition.…”

Section: The Value Of Political Connectionsmentioning

confidence: 86%

Structural Changes in the Chinese Stock Market: A Review of Empirical Research

2014

China Account Financ Rev

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China’s stock market has gone through major structural changes since its inception in the early 1990s. In this survey article, we review the empirical literature published in 15 leading accounting and finance journals from 1998 to 2013 that documents these important structural changes. In analysing this literature, we focus on the ‘distinctiveness’ of the Chinese stock market compared with developed stock markets (e.g. US) and the research opportunities generated by the China setting. Key themes include China’s share issue privatisation (SIP) reforms, the political connections in privately owned companies, the characteristics of Chinese listed companies and their governance, the regulatory environment reforms in China, and the evolving role played by auditors and other information intermediaries.

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“…No enforcement presents a motivation to contest, challenge and attack the system (as was the case with SOE 3). However, when politicization is high and enforcement low on an SOE where the political work of the CEO strongly aligns to the source of the political pressure (as observed for SOE 1), the strategic response of the organization is one strongly in favor of politicization (supporting Lei et al 2013;and Tu et al 2013;Perkmann and Spicer, 2008), notwithstanding low enforcement. The SOE 1 CEO openly cooperated and acquiesced or adopted a strategic compromise stance in order to be seen as a future leader within the broader Chinese political system.…”

Section: Our Boss Doesn't Like It -It Is One Of the Reasons Why We Armentioning

confidence: 96%

“…We observe how institutional work as evidenced through the political work undertaken by the SOE 1 CEO explains how SOE 1 might exhibit tenets of acquiescence in relation to EVA ® even when it did not suit them (possessing strong institutional influence, the CEO sought to ingratiate himself to SASAC) but was afforded strong negotiation influence when requesting for compromise (SASAC wanted to appease a potentially powerful future government official). The more subtle defining of this acceptance has not been proposed in prior accounting studies (Tu et al 2013). …”

Section: 1a Positive Blended Response -Acquiescence and Compromise mentioning

confidence: 98%

“…The manner by which we empirically validate the variation in responses arising from different SOE CEOs and associate it to the "political work" (Lawrence et al, 2011) of these key agents, and subsequently identify two factors driving this plurality (accounting centricity and institutional potential) to provide explanatory clarity as to why these purposive actions usurp the more structural effects posed by traditional institutionalism extends beyond what the prior literature has been able to advance (Wu et al 2012;Tu et al. 2013;Chen et al.…”

mentioning

confidence: 96%

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How Do Enterprises Respond to a Managerial Accounting Performance Measure Mandated by the State?

Bhimani

Dai

Sivabalan

et al. 2017

Journal of Management Accounting Research

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We study the application of Economic Value Added (EVA ® ) by Chinese stateowned enterprises (SOEs) following a regulatory requirement to deploy the measure. Our theoretical framing engages conceptual elements of institutional work and public accountability research to consider why key actors vary in their responses to the mandated application of EVA ® . Our data derives from thirty interviews with managers in three SOEs and their oversight body (the State-owned Assets Supervision and Administration Commission of the State Council). We identify two relevant dimensions associated with managers: 'accounting centricity' and 'institutional potential' and report that they drive the authenticity of actors' responses in the absence of enforcement of the mandated measure. When accounting centricity and institutional potential align to the dictates of the higher implementing body, accountability remains high notwithstanding the absence of enforcement. When these two factors do not align, accountability fails even when politicization is high and formal accountability claims are high. Where the two factors are partially present, the accountability response is mixed. Our study contributes to a refinement of the perspective advanced by prior investigations of institutionally sanctioned roll outs of accounting systems highlighting in particular, the role of human agency in explaining actor responses.

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Political connections and privatization: Evidence from China

Cited by 72 publications

References 56 publications

Political Connection, Board Characteristics and Firm Performance in Nigeria

Political Connection, Board Characteristics and Firm Performance in Nigeria

Structural Changes in the Chinese Stock Market: A Review of Empirical Research

How Do Enterprises Respond to a Managerial Accounting Performance Measure Mandated by the State?

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