Political uncertainty and firms' information environment: Evidence from China

Chen, Yunsen; Chen, Deqiu; Wang, Weimin; Zheng, Dengjin

doi:10.1016/j.jaccpubpol.2018.01.005

Cited by 100 publications

(59 citation statements)

References 52 publications

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“…High market growth and demand itself, however, is not the key to success, a result which has been confirmed by many firms trying to enter the Chinese market without having taken local political conditions associated with the whims and fluctuations of communist party officials into account. This long-term, empirical finding is supported by various studies (Chen et al, 2018;Luo et al, 2017;Zhuang et al, 1998). To pursue market entry opportunities, companies have to negotiate on the spot, which can be rather costly.…”

Section: Theoretical Backgroundsupporting

confidence: 65%

Determining Probabilities for a Commercial Risk Model of Czech Exports to China with Respect to Cultural Differences and in Financial Management

Polák¹

2019

JOC

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Certain risks associated with particular human activities cannot be eliminated, with commercial risks representing factors of business success or failure. In the current turbulent environment, proper risk assessment and management is of utmost importance in maintaining competitiveness. The aim of this paper is to present the output of our research which focused on the assessment of commercial risk faced by exporters to China, specifically, determining the probabilities for commercial risk model management. Along with this, the cultural context of the Chinese market influencing risk size are explored, particularly the concepts of tan-wej, kuan-si, li-ťie and mien-c', the effect of which was confirmed by our exporter survey. The research focused on Czech companies exporting goods and technologies to China. The study involves manufacturing enterprises (section C, CZ-NACE Rev. 2) as well as, more specifically, medium and large scale engineering, along with chemical and electrical power companies. Firms exporting common consumer goods, raw materials and recyclables were excluded from the study. The data were obtained from controlled interviews with company representatives (with 58 percent of the exporters participating in a 2013 research) and from Justice.cz (2016) which published economic results of all exporters registered in 2015. The study outcomes were further reviewed in 2016-2017 using follow-up interviews and literature reviews. In collecting the primary data and verifying research outcomes, semi-structured and structured interviews were conducted, following which methods of descriptive statistics and statistical dependence analysis were applied. The findings allow for the construction of a commercial risk assessment model for export to China, involving relative risk costs.

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Section: Theoretical Backgroundsupporting

confidence: 65%

Determining Probabilities for a Commercial Risk Model of Czech Exports to China with Respect to Cultural Differences and in Financial Management

Polák¹

2019

JOC

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“…In the Chinese political system, subnational districts such as provinces and provincial level cities are semi‐autonomous economic regions whose leaders wield tremendous discretions in local economic matters (Chen et al ., ) . We focus on the governor but not the Communist Party secretary for two reasons.…”

Section: Literature Background and Hypothesismentioning

confidence: 97%

Regional favoritism and tax avoidance: evidence from China

Chen

Huang

Liu

et al. 2019

Accounting & Finance

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This paper investigates the effect of officials' regional favoritism on corporate tax avoidance activity in China. We find that firms located in regions that were formerly administered by the current provincial governors have a higher level of tax avoidance than other firms in the province. Further evidence indicates that regional favoritism affects tax avoidance through two channels: regional politicians' personal connections with the governor and firms' political access to the governor. Overall, the findings support China's current official selection and promotion guidelines that restrict hometown favoritism. Our results further imply that favoritism can also extend to officials' former administrative regions.

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“…Moreover, many other recent studies have departed from focusing on general elections to other forms of political or politically-motivated events. For example, while some consider the impact of political events and political uncertainty on stock market performance (see Chen et al, 2018;Hartwell, 2018;Ahmed, 2017;Jeribi et al, 2015, etc. ), a few others focus on regime changes and comparison of ruling parties (see Kituku, 2014;Santa-Clara and Valkanov, 2003;Oumar and Ashraf, 2011, etc.).…”

Section: Review Of Literaturementioning

confidence: 99%

The Persistence of Stock Market Returns During the Presidential Elections in Nigeria

Yaya

Adekoya

Adesiyan³

2020

SSRN Journal

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Following empirical evidences that political activities impact stock market performance, this present paper examines efficiency and volatility of Nigerian stock market during presidential elections. We use a 5-month event window approach to obtain the data for each election period. This implies that for each election period, we obtain the daily stock price index for the election month (4 weeks) and two months (8 weeks) before and after it. Our fractional integration technique reveals that the stock price index was persistent during most of the election years, with the exemptions of 2011 and 2019 election year, while 2015 election period recorded the highest volatility. However, accounting for structural breaks following the approach of Enders and Lee (2012a,b) that inculcates nonlinear smooth breaks in the Fourier function, the stock market seemed to be efficient only during the 1999, 2011 and 2019 presidential election periods. The 2011 and 2019 are periods when the elections produced candidates that ran for a two-term each. On the other hand, the highest stock market volatility is still maintained at the 2015 election which was also interestingly the year that the recent 2015/2016 recession in the country kick-started. Our findings have important policy implications for potential investors.

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Political uncertainty and firms' information environment: Evidence from China

Cited by 100 publications

References 52 publications

Determining Probabilities for a Commercial Risk Model of Czech Exports to China with Respect to Cultural Differences and in Financial Management

Determining Probabilities for a Commercial Risk Model of Czech Exports to China with Respect to Cultural Differences and in Financial Management

Regional favoritism and tax avoidance: evidence from China

The Persistence of Stock Market Returns During the Presidential Elections in Nigeria

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