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Political connections, institutional environment and informativeness of stock price

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  • Xie, Tao
  • Li, Yanan

Abstract

This study empirically investigates how political connections affect the information content of stock prices. We find that political connections increase stock price synchronicity; political connections in the category of government officials significantly increase stock price synchronicity; political connections in the category of industrial and commercial associations significantly decrease stock price synchronicity; the relationship between political connections in the category of NPC deputies and CPPCC members and stock price synchronicity is not significant; political connections in the category of NPC deputies and CPPCC members significantly increase stock price synchronicity in the case of direct listing.

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  • Xie, Tao & Li, Yanan, 2023. "Political connections, institutional environment and informativeness of stock price," Finance Research Letters, Elsevier, vol. 55(PA).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002647
    DOI: 10.1016/j.frl.2023.103892
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    2. Wei, Feng & Zhou, Lei, 2024. "Do state-owned enterprises prefer capital from private enterprises with better ESG performance? Evidence from China's mixed ownership reforms," Finance Research Letters, Elsevier, vol. 62(PA).

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