IDEAS home Printed from https://ideas.repec.org/a/eee/finana/v105y2025ics1057521925005332.html
   My bibliography  Save this article

The hidden cost of geopolitical risk: Corporate violations in China

Author

Listed:
  • Su, Yu

Abstract

Drawing on data from Chinese A-share listed companies between 2000 and 2020, this study examines the hidden costs of geopolitical risk, focusing on corporate violations. Findings suggest that heightened geopolitical risk significantly exacerbates corporate violations. Key mechanisms driving these hidden costs include weakened financial regulation, increased firm-specific idiosyncratic risk, and greater risk-taking behavior among firms. Further analysis indicates that firms with stronger reputations are better able to mitigate the effects of geopolitical risk on corporate violations, whereas firms with substantial overseas investments are more likely to engage in violations when geopolitical risk is heightened. This research highlights previously underexplored indirect effects of geopolitical instability on corporate governance, offering valuable policy implications for regulators and practitioners.

Suggested Citation

  • Su, Yu, 2025. "The hidden cost of geopolitical risk: Corporate violations in China," International Review of Financial Analysis, Elsevier, vol. 105(C).
    • Handle: RePEc:eee:finana:v:105:y:2025:i:c:s1057521925005332
    DOI: 10.1016/j.irfa.2025.104446
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1057521925005332
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irfa.2025.104446?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finana:v:105:y:2025:i:c:s1057521925005332. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620166 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.