| ID | 143435 |
| Title Proper | Political connections and access to IPO markets in China |
| Language | ENG |
| Author | Zhou, Hong ; Li, Guoping |
| Summary / Abstract (Note) | Using hand-collected data on IPOs by private-owned enterprises, this article examines the regulatory benefits of political connections in China's state-controlled going public process, a subject that has rarely been investigated in existing literature. This article makes the following findings: first, political connections have significant positive impact on enterprises' chances of being approved for IPOs; second, enterprises with political connections are significantly more likely to receive preferential treatments (e.g., higher offering price-to-earning ratio) from regulatory authorities; third, enterprises with political connections are significantly less likely to be selected for pre-IPO on-site auditing by regulatory authorities. The findings of this article may provide answer to the question why China has been so reluctant to adopt disclosure-based regulatory regime as well as insights into the puzzle of the consistent poor performance of China's stock markets. |
| `In' analytical Note | China Economic Review Vol. 34; Apr 2015: p.76-93 |
| Journal Source | China Economic Review 2015-04 33 |
| Key Words | IPO ; China's Stock Market ; Political Connections ; Private-Owned Enterprise ; Regulatory Benefits of Political Connections |