Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 28, 2019 erstellt
Beschreibung:
To understand the mechanisms through which political connections impact firm value and performance, we study how political connections affect connected firms and their peers. Following the announcement of anti-corruption investigations in China, we show that the industry peers of firms connected to investigated officials experience a decrease in value but not in performance, despite connected firms' significant deterioration of value and performance. Interestingly, we document evidence of a transfer of reduced effective tax rates away from connected firms to firms headquartered in the same city, mitigating any negative value impacts. This evidence suggests that severing political connections can have important spillover effects on industries and cities