The Impact of Political Connection on Enterprise Value: Empirical Evidence from China's Anti-Corruption Reform

摘要

To some extent, anti-corruption has destroyed the original political connection of enterprises, deprived enterprises of rent-seeking interests such as financing convenience and preferential access to investment projects, and will damage the value of political affiliated enterprises in the short term. Based on the realistic background of the "Eight Provisions" issued by the Central Committee of China, this paper uses the event study method to study the impact of political connections on the value of enterprises. The study finds that the market reaction of anti-corruption reform is significantly positive; compared with the politically related listed companies, the positive market reaction of the non-politically related listed companies is greater. This shows that anti-corruption is "good news" for listed companies and is conducive to the promotion of corporate value, especially for those without political affiliation.