Dr Xian Gu xian.gu@durham.ac.uk
Professor in Finance
This paper investigates how political influence affects firms’ financial flexibility and speed of adjustment toward target leverage ratios. We find that at the macro level, firms in environments with high political advantages, proxied by provincial affiliations with heads of state as well as political status and party rank of provincial leaders, adjust faster. At the micro level, firms that are state-owned, have CPC members as executives, or bear low exposure to changes in political uncertainty adjust faster. When interacted, the micro-level political factors have more significant impact.
Gu, X., Hasan, I., & Zhu, Y. (2019). Political influence and financial flexibility: Evidence from China. Journal of Banking and Finance, 99, 142-156. https://doi.org/10.1016/j.jbankfin.2018.12.002
Journal Article Type | Article |
---|---|
Acceptance Date | Dec 5, 2018 |
Online Publication Date | Dec 8, 2018 |
Publication Date | 2019-02 |
Deposit Date | Jul 30, 2020 |
Publicly Available Date | Jul 31, 2020 |
Journal | Journal of Banking and Finance |
Print ISSN | 0378-4266 |
Publisher | Elsevier |
Peer Reviewed | Peer Reviewed |
Volume | 99 |
Pages | 142-156 |
DOI | https://doi.org/10.1016/j.jbankfin.2018.12.002 |
Public URL | https://durham-repository.worktribe.com/output/1265160 |
Accepted Journal Article
(825 Kb)
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Publisher Licence URL
http://creativecommons.org/licenses/by-nc-nd/4.0/
Copyright Statement
© 2018 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
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