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Political considerations in the decision of Chinese SOEs to list in Hong Kong

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Listed:
  • Hung, Mingyi
  • Wong, T.J.
  • Zhang, Tianyu

Abstract

This paper investigates why Chinese state-owned enterprises (SOEs) with strong political connections (i.e., politically connected firms) are more likely to list overseas than non-politically connected firms. We find that connected firms' post-overseas listing performance is worse than that of non-connected firms. This evidence suggests that connected firms' managers list their firms overseas for private (political) benefits. Consistent with this private benefits explanation, we further find that connected firms' managers are more likely to receive political media coverage or a promotion to a senior government position subsequent to overseas listing than domestic listing.

Suggested Citation

  • Hung, Mingyi & Wong, T.J. & Zhang, Tianyu, 2012. "Political considerations in the decision of Chinese SOEs to list in Hong Kong," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 435-449.
    • Handle: RePEc:eee:jaecon:v:53:y:2012:i:1:p:435-449
    DOI: 10.1016/j.jacceco.2011.10.001
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    References listed on IDEAS

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    More about this item

    Keywords

    Partial privatization; China; Overseas listing; Political connection;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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