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Can political attributes reduce financing costs? An analysis of the mediating effect based on red tourism

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  • Wang, Ke
  • Cui, Can

Abstract

This paper uses data from Chinese listed companies from 2001 to 2023 to investigate whether political attributes can reduce corporate financing costs, introducing red tourism as an intermediary mechanism. The study finds that political attributes significantly lower financing costs, and this result remains robust under various robustness checks. Furthermore, red tourism plays a mediating role between political attributes and financing costs. Heterogeneity analysis indicates that the impact of political attributes on financing costs is more pronounced among small and medium-sized enterprises, firms with lower financing constraints, and enterprises located in the central and eastern regions of China. This research not only expands the perspective on the relationship between political attributes and corporate finance but also highlights the pivotal role of cultural resources in the interplay between institutions and finance.

Suggested Citation

  • Wang, Ke & Cui, Can, 2026. "Can political attributes reduce financing costs? An analysis of the mediating effect based on red tourism," Finance Research Letters, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finlet:v:89:y:2026:i:c:s1544612325025553
    DOI: 10.1016/j.frl.2025.109306
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