Article ID Journal Published Year Pages File Type
5092359 Journal of Comparative Economics 2014 17 Pages PDF
Abstract
This paper examines the economic consequences of political participation by entrepreneurs in China. Using unique data on political participation and initial public offerings by entrepreneurial firms, we find that firms controlled by entrepreneurs who participate in politics exhibit superior post-IPO performance. We also find that firms characterized by political participation are subject to less underpricing. Furthermore, the superior performance is concentrated among firms that operate in an environment characterized by rich rent-seeking opportunities instead of abundant business opportunities, suggesting that political participation is facilitating rent seeking rather than serving simply as a proxy for political recognition for entrepreneurship.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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