The contingent value of CEO political connections: A study on IPO performance in China |
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| Authors: | Jianfeng Wu Sali Li Zijie Li |
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| Institution: | 1. Business School, The University of International Business and Economics, Beijing, China, 100029
2. Sheldon B. Lubar School of Business, The University of Wisconsin—Milwaukee, Milwaukee, WI, WI53201, USA
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| Abstract: | This study investigates the effect of corporate political connections on IPO performance in an emerging economy. More specifically, it examines how CEO political connections affect the IPO performance of 428 firms in China from 2000 to 2004. The empirical results show that CEO political connections have a positive impact on firms’ ability to raise capital from public markets. The results also show that CEO political connections with the central government play a more important role in IPO performance than political connections with regional governments. In addition, the positive effect of central political connections on IPO performance is weaker in market-restricted regions but stronger in highly regulated industries. The findings highlight the contingent value of CEO political connections in an emerging economy. |
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