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Communist party committee direct control and the market value of corporate cash holdings

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  • Li, Xiaorong
  • Zhang, Fan
  • Chan, Kam C.

Abstract

We study the impact of having a communist party committee (CPC) member directly involved in the management of a firm on the market value of cash. Our findings suggest that the CPC member can enhance the market value of cash only when he or she is a director of the board. When the CPC members are supervisors of a supervisory board or senior management, they have no effect.

Suggested Citation

  • Li, Xiaorong & Zhang, Fan & Chan, Kam C., 2017. "Communist party committee direct control and the market value of corporate cash holdings," Finance Research Letters, Elsevier, vol. 23(C), pages 179-189.
    • Handle: RePEc:eee:finlet:v:23:y:2017:i:c:p:179-189
    DOI: 10.1016/j.frl.2017.05.008
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    Cited by:

    1. Nan Zhang & Qiaozhuan Liang & Huiying Li & Xiao Wang, 2022. "The organizational relationship–based political connection and debt financing: Evidence from Chinese private firms," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 69-105, January.
    2. Xie, Sujuan & Lin, Bingxuan & Li, Jingjing, 2022. "Political Control, Corporate Governance and Firm Value: The Case of China," Journal of Corporate Finance, Elsevier, vol. 72(C).

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    More about this item

    Keywords

    Communist party control; Cash;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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