Propping by controlling shareholders, wealth transfer and firm performance: Evidence from Chinese listed companies

Propping acts by controlling shareholders are common in Chinese listed firms In this paper, we use data on related-party transactions of all listed Chinese firms from 2002 to 2008 to investigate the motivation behind controlling share holders' propping acts and subsequent wealth-transfer behavior and how both affect firm performance. We find that such institutional motivators as the maintenance of shell resources and qualification for refinancing have a significant effect on the propping behavior of controlling shareholders of Chinese listed firms and that such behavior is often followed by more serious tunneling when shareholders are driven by these motivators. Compared with non-state owned firms, state-owned firms with the motivation to qualify for refinancing exhibit more severe tunneling after engaging in propping behavior. We also find that while propping by controlling shareholders improves a firm's current operating performance, in firms whose controlling shareholders' are motivated by the desire to maintain shell resources or obtain a refinancing qualification their performance declines in the following year because of subsequent tunneling. The results presented in this paper provide us with a better understanding of the relationship between propping and tunneling, controlling shareholders engagement in both and the consequences of that behavior.

反腐下的高管政治关联——光彩依旧抑或黯然失色

本文基于2009-2015年中国A股上市公司样本,验证十八大以来的腐败治理是否有效抑制了企业高管政治关联的价值效应。研究发现,高管政治关联的价值效应主要体现在非国有企业中,但在经济转型新时期的腐败治理背景下得到了有效抑制。与此同时,在反腐程度较高的地区、改革前腐败程度较高或市场化程度较低的地区以及政府管制行业中,高管政治关联的价值效应下降得更为明显。本文一系列的稳健性检验一致验证了上述结果。本文还发现,高管政治关联下价值减少的内在机制在于资源效应减弱和负面干预效应。本文提供的微观证据表明,反腐有助于促进企业经营模式和资源配置方式进一步市场化。