Politicians’ promotion incentives and bank risk exposure in China

Wang, Li; Menkhoff, Lukas; Schröder, Michael; Xu, Xian

doi:10.1016/j.jbankfin.2018.11.013

Cited by 29 publications

(4 citation statements)

References 66 publications

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“…Enterprises have limited influence in the legislative and regulatory processes, functioning primarily as policy executors. Politicians employ their authority to direct firms toward achieving political objectives, heightening their chances of promotion (Hao & Lu, 2018; Piotroski & Zhang, 2014; Wang et al, 2019; Yan & Chang, 2018; You et al, 2018; M. Zhang et al, 2016). SOEs assume a significant role for serving political interests at the expense of financial performance (Bai et al, 2006; Fan et al, 2013).…”

Section: Institutional Background and Research Hypothesesmentioning

confidence: 99%

Assessment of local officials and government‐initiated CSR: Evidence from targeted poverty alleviation in China

Huang,

Li,

2023

Economics & Politics

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This paper explores whether the assessment of local government officials affects firm participation in targeted poverty alleviation. Using a sample of Chinese A‐share listed companies in the Midwest from 2016 to 2019, the results show that the greater the importance of officials' poverty alleviation assessment, the higher the participation of firms in precise poverty alleviation. State‐owned enterprises (SOEs) contribute more to the reduction of destitution than private enterprises. We further find that local SOEs' participation in precision poverty alleviation enhances the likelihood of executive promotion, while private enterprises' participation in precision poverty alleviation increases government subsidies and reduces the cost of debt financing. These findings imply that the evaluation mechanisms of Chinese officials can effectively promote enterprises fulfilling social responsibilities.

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Section: Institutional Background and Research Hypothesesmentioning

confidence: 99%

Assessment of local officials and government‐initiated CSR: Evidence from targeted poverty alleviation in China

Huang,

Li,

2023

Economics & Politics

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“…The central government manages local government officials through performance-related assessments to reduce agency costs [ 34 ]. Previous works in the literature found that official promotion incentive can promote local investment [ 47 ], increase credit expansion [ 48 ] and improve water pollution [ 49 ]. As poverty alleviation strategies are becoming more important, the Chinese government have begun to evaluate the effectiveness of local government officials in poverty alleviation.…”

Section: Institutional Background and Research Hypothesesmentioning

confidence: 99%

“…In France, corporate CEOs with political backgrounds help re-elect politicians in their districts by having higher job and plant creation rates [ 60 ]. In transition and developing economies, governments intervene in the investment allocation tendencies of firms, thereby achieving government objectives [ 61 ] or stimulating economic growth by intervening in bank loans to finance projects [ 48 ]. While these papers focus on political goals centered on GDP, this paper attempts to examine the pro-poor political goals of local government officials.…”

Section: Institutional Background and Research Hypothesesmentioning

confidence: 99%

The Impact of Government Official Assessment on Ecological Poverty Alleviation: Evidence from Chinese Listed Companies

Huang

2022

IJERPH

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Ecological poverty alleviation launched by the Chinese government is an innovative green development measure that combines targeted poverty alleviation with ecological protection to realize the ecological environmental protection and income growth of the impoverished population. Based on the Chinese government’s policy of poverty alleviation assessment for provincial government officials in 2016, this paper studies whether the assessment of government officials promote enterprises’ participation in ecological poverty alleviation. Using the sample of Chinese A-share listed companies from 2016 to 2020, the empirical test shows that the more important the assessment of poverty alleviation by officials, the more likely local enterprises are to participate in targeted poverty alleviation and the higher the investment level is likely to be. The results pass a series of robustness tests. In addition, this paper further finds that enterprise participation in ecological poverty alleviation can effectively reduce local water pollution, air pollution and solid pollution, thus improving the ecological environment. It suggests that the assessment mechanism of Chinese government officials can effectively promote multi-dimensional ecological poverty alleviation. The contributions of this paper are as follows. Firstly, it is helpful to expand the relevant literature on enterprise environmental protection from the perspective of ecological poverty alleviation. Secondly, it is helpful to expand the literature related to government–enterprise interaction from the perspective of the assessment of government officials. Finally, it is helpful to enrich and expand the relevant literatures on promotion incentives of government officials from the perspective of ecological poverty alleviation.

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“…Samples within the same category are defined as "comparable". The promotion pressures of local leaders will only come from the economic performances in regions within the comparable region (Fang et al 2018;Wang et al 2019). Next, we calculate the difference between the value of the budget surplus ratio, the unemployment rate, and the GDP growth rate in each city and their mean values within the comparable region (i.e., in cities within the same category).…”

Section: Promotion Pressuresmentioning

confidence: 99%

Promotion Pressures of Local Leaders and Real Estate Investments: China and Leader Heterogeneity

Chen

Qiu

2022

JRFM

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Chinese local officials have strong incentives to stimulate economic growth in the pursuit of promotion. However, the connection between promotion pressure of local officials and investment in the real estate market has not been rigorously explored. By using the panel data of local leaders (municipal party secretaries or mayors) from 2002 to 2010, this paper investigates the correlations between local leaders’ promotion pressures and growth in real estate investments. Empirical results show that local leaders’ promotion pressures are significantly and positively correlated with the growth of the real estate market. Furthermore, the positive effect of promotion pressure on real estate development is significant if the leader is young or born locally, whereas this effect is insignificant if the leader is older or not a native. Our findings provide new evidence on how local leaders may strategically intervene in local economic activities.

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Politicians’ promotion incentives and bank risk exposure in China

Cited by 29 publications

References 66 publications

Assessment of local officials and government‐initiated CSR: Evidence from targeted poverty alleviation in China

Assessment of local officials and government‐initiated CSR: Evidence from targeted poverty alleviation in China

The Impact of Government Official Assessment on Ecological Poverty Alleviation: Evidence from Chinese Listed Companies

Promotion Pressures of Local Leaders and Real Estate Investments: China and Leader Heterogeneity

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