ترجمه مقاله نقش ضروری ارتباطات 6G با چشم انداز صنعت 4.0
- مبلغ: ۸۶,۰۰۰ تومان
ترجمه مقاله پایداری توسعه شهری، تعدیل ساختار صنعتی و کارایی کاربری زمین
- مبلغ: ۹۱,۰۰۰ تومان
Abstract
This study examines whether crackdown on political corruption in China affects future stock price crashes. Using data from corruption-related prosecutions, we find that firms under prosecuted official jurisdictions experience a significant decrease in crash risk after the crackdown. Crosssectional tests show that results are more pronounced for firms with higher political dependence on governments and for firms with worse information environment. Moreover, channel tests provide direct evidence that crackdown decreases crash risk by reducing political risk and bad news hoarding. Overall, our study offers novel evidence on how crackdown on corruption benefits firms.
Conclusion
This study investigates the impact of corruption crackdown on firm-specific crash risk. Using data of corruption prosecution cases of municipal-level officials in China, we find that firms located in corrupted regions experience a significant decrease in crash risk in the years after the crackdown. Our empirical results suggest that the crackdown on corrupt government officials disrupts political connections and protections, and reduces political risk as well as impairs the ability and incentive of managers to suppress bad news. Consequently, crash risk in the future becomes smaller. Further analyses show that our results are stronger for firms with closer political dependency on local governments and for firms with worse information environment. Finally, using channel tests, we provide direct evidence that crackdown reduces future crash risk by lowering political risk and curbing bad news hoarding. Our empirical results are also robust to a battery of sensitivity checks. To sum up, our evidence suggests that crackdown on political corruption reduces future stock price crash risk and contributes to the stability of the stock market.