TITLE:
Political Connection, Management Promotion and Risk Taking Activities
AUTHORS:
Qiaoyi Zhao, Suowen Wang, Chao Chen
KEYWORDS:
Political Connection, Management Promotion, Firm Pyramid, Duration, Risk Taking Activities
JOURNAL NAME:
Modern Economy,
Vol.5 No.7,
June
25,
2014
ABSTRACT:
This paper investigates how political
connection and management promotion affect chances of risk-taking activities,
in order to offer theoretical support for state-owned enterprises to select
optimal managers, and to maintain and increase their company values. Using the
data of chairman of state-owned listed enterprises in Shenzhen securities market,
we find that in state-owned listed enterprises, the shorter the pyramid of
listed enterprises to ultimate shareholders is, the closer the political connection is, the more likely the chairman is to take up
risk-taking activities for promotion. While for the same pyramid, the longer
the tenure of chairman, the more chances of risk-taking activities.