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...

Full description

Saved in:

Bibliographic Details
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
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-usm-ep.60426
record_format	uketd_dc
spelling	my-usm-ep.604262024-04-25T03:34:43Z Political Connection And Capital Structure Deviation: The Interaction Role Of Corporate Governance Mechanisms On The China’s Listed Construction Firms 2023-01 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 http://eprints.usm.my/60426/ http://eprints.usm.my/60426/1/HU%20XIANG%20-%20TESIS%20cut.pdf application/pdf en public phd doctoral Universiti Sains Malaysia Pusat Pengajian Pengurusan
institution	Universiti Sains Malaysia
collection	USM Institutional Repository
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
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
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
granting_institution	Universiti Sains Malaysia
granting_department	Pusat Pengajian Pengurusan
publishDate	2023
url	http://eprints.usm.my/60426/1/HU%20XIANG%20-%20TESIS%20cut.pdf
_version_	1804888934404063232

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

Similar Items