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Political Connections and the Cost of Equity Capital in China
Cost of Equity
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In this essay, I investigate the association between top executives political connections and the cost of equity capital using a sample of firms listed on Shanghai stock exchange. This essay finds that politically connected firms have a lower cost of equity capital than their non-connected counterparts, which is consistent with prior literature. I also find that when executives have been government officials, especially with higher ranks, the firms exhibit a lower cost of equity capital, especially lower for chairman with the higher ranks of civil servants and in larger firms. Moreover, my results suggest that the effect of political connections is stronger in larger firms regardless of types of ownership.
|Appears in Collections:||財務金融學系所|
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