IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v54y2018i9p2053-2077.html
   My bibliography  Save this article

Political and Interlocking Connections in the Boardroom on Private Equity Placements

Author

Listed:
  • M. M. Fonseka
  • Omar Al Farooque
  • R. L. Theja N. Rajapakse
  • Gao-Liang Tian

Abstract

This study examines the influence of directors who are politically connected and/or have boardroom interlocking on private equity placements (PEPs) in Chinese listed firms. We document that interlocked directors can significantly influence the propensity to apply for PEPs and approval of PEPs and reduce the cost of PEPs while providing greater access to proceeds from PEPs through lowering information asymmetry and information cost. Although politically connected directors have a significant role in the approval of PEPs, they are more likely to reduce the monitoring effects and increase agency problems, which lead to increased cost of PEPs and reduced proceeds from PEPs. The results also reveal that political connection diminishes the benefits of interlocking directors for firms having directors with both interlocking and political ties.

Suggested Citation

  • M. M. Fonseka & Omar Al Farooque & R. L. Theja N. Rajapakse & Gao-Liang Tian, 2018. "Political and Interlocking Connections in the Boardroom on Private Equity Placements," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(9), pages 2053-2077, July.
    • Handle: RePEc:mes:emfitr:v:54:y:2018:i:9:p:2053-2077
    DOI: 10.1080/1540496X.2017.1355300
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2017.1355300
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2017.1355300?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 search for a different version of it.

    More about this item

    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:mes:emfitr:v:54:y:2018:i:9:p:2053-2077. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    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.