Staff View: Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms

Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms

China's political-economic system allows the government to have a dominant position in the economy and absolute control over a significant number of natural and economic resources. Chinese firms are thus eager to establish a political connection with the government to obtain superiorities in th...

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Main Author:	Hu, Xiang
Format:	Thesis
Language:	English
Published:	2023
Subjects:	HD28-70 Management. Industrial Management
Online Access:	http://eprints.usm.my/60426/1/HU%20XIANG%20-%20TESIS%20cut.pdf http://eprints.usm.my/60426/
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id	my.usm.eprints.60426
record_format	eprints
spelling	my.usm.eprints.60426 http://eprints.usm.my/60426/ Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms Hu, Xiang HD28-70 Management. Industrial Management China's political-economic system allows the government to have a dominant position in the economy and absolute control over a significant number of natural and economic resources. Chinese firms are thus eager to establish a political connection with the government to obtain superiorities in the market. The influence of political connection on capital structure deviation has been scarcely studied. The Chinese construction industry has the highest average debt ratio among all Chinese sectors, and as the representatives of China's construction firms, China's listed construction firms also have the highest average debt ratio compared with all other listed firms. In addition, over 70% of China's listed construction firms have a political connection. Thus, the study's first objective is to investigate whether the actual capital structures of China's listed construction firms deviate from their optimal levels. The second objective is to examine the relationship between political connection and capital structure deviation by using the data of China's listed construction firms from 2010 to 2019. The third objective is to explore the interaction effect of corporate governance mechanisms on the relationship between political connection and capital structure deviation. This research uses fixed-effect model to analyze the data. The first finding shows that almost all of China's listed construction firms have a positive deviation in capital structure. That is, most of China's listed construction firms are over-indebted. The positive capital structure deviation represents a higher capital cost and a lower firm value. The second finding is a significant positive relationship between political connection and capital structure deviation. 2023-01 Thesis NonPeerReviewed application/pdf en http://eprints.usm.my/60426/1/HU%20XIANG%20-%20TESIS%20cut.pdf Hu, Xiang (2023) Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms. PhD thesis, Universiti Sains Malaysia.
institution	Universiti Sains Malaysia
building	Hamzah Sendut Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Sains Malaysia
content_source	USM Institutional Repository
url_provider	http://eprints.usm.my/
language	English
topic	HD28-70 Management. Industrial Management
spellingShingle	HD28-70 Management. Industrial Management Hu, Xiang Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms
description	China's political-economic system allows the government to have a dominant position in the economy and absolute control over a significant number of natural and economic resources. Chinese firms are thus eager to establish a political connection with the government to obtain superiorities in the market. The influence of political connection on capital structure deviation has been scarcely studied. The Chinese construction industry has the highest average debt ratio among all Chinese sectors, and as the representatives of China's construction firms, China's listed construction firms also have the highest average debt ratio compared with all other listed firms. In addition, over 70% of China's listed construction firms have a political connection. Thus, the study's first objective is to investigate whether the actual capital structures of China's listed construction firms deviate from their optimal levels. The second objective is to examine the relationship between political connection and capital structure deviation by using the data of China's listed construction firms from 2010 to 2019. The third objective is to explore the interaction effect of corporate governance mechanisms on the relationship between political connection and capital structure deviation. This research uses fixed-effect model to analyze the data. The first finding shows that almost all of China's listed construction firms have a positive deviation in capital structure. That is, most of China's listed construction firms are over-indebted. The positive capital structure deviation represents a higher capital cost and a lower firm value. The second finding is a significant positive relationship between political connection and capital structure deviation.
format	Thesis
author	Hu, Xiang
author_facet	Hu, Xiang
author_sort	Hu, Xiang
title	Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms
title_short	Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms
title_full	Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms
title_fullStr	Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms
title_full_unstemmed	Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms
title_sort	political connection and capital structure deviation: the interaction role of corporate governance mechanisms on the china’s listed construction firms
publishDate	2023
url	http://eprints.usm.my/60426/1/HU%20XIANG%20-%20TESIS%20cut.pdf http://eprints.usm.my/60426/
_version_	1797907864918949888
score	13.211869

Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms

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