Political Control, Corporate Governance and Firm Value: The Case of China
Date of Original Version
We examine whether requiring a Party committee to lead corporate governance at listed state-owned enterprises (SOEs) affects firm value in China. We find that the market reacts positively to the inclusion of Party leadership in SOEs' governance structure and that the prospect of a crackdown on SOE corruption is likely to be the reason. The China governance model is strikingly different from other known models, and our findings suggest that a convergence of the corporate governance system of different countries due to globalization might not be the only outcome.
Journal of Corporate Finance
Xie, Sujuan, Bingxuan Lin, and Jingjing Li. "Political Control, Corporate Governance and Firm Value: The Case of China." Journal of Corporate Finance 72, (2022). doi:10.1016/j.jcorpfin.2022.102161.