Political Connections and Corporate Borrowing: an Analysis on the Listed Real Estate Firms in China

Yang, Z; Fan, Y; Shi, S; Liao, J

Political Connections and Corporate Borrowing: an Analysis on the Listed Real Estate Firms in China

Yang, Z Fan, Y Shi, S

Liao, J

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Publication Type:: Journal Article
Citation:: Journal of Real Estate Finance and Economics, 2018, 57 (3), pp. 315 - 350
Issue Date:: 2018-10-01

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Field	Value	Language
dc.contributor.author	Yang, Z	en_US
dc.contributor.author	Fan, Y	en_US
dc.contributor.author	Shi, S https://orcid.org/0000-0003-4188-5151	en_US
dc.contributor.author	Liao, J	en_US
dc.date.issued	2018-10-01	en_US
dc.identifier.citation	Journal of Real Estate Finance and Economics, 2018, 57 (3), pp. 315 - 350	en_US
dc.identifier.issn	0895-5638	en_US
dc.identifier.uri	http://hdl.handle.net/10453/121876
dc.description.abstract	© 2017, Springer Science+Business Media, LLC. This paper investigates the relationship between political connections and corporate borrowing behaviour using the listed real estate development firms in China from 2001 to 2014. Evidence from China is of particular importance due to China being the world’s largest emerging and transition economy. We find that the benefit of political connections is manifested in firms obtaining loans from state-controlled banks in the first instance, but that political influence diminishes over subsequent loan extensions. The performance based requirement prevents banks providing systemic favourable treatment to the connected real estate firms, especially after the Chinese banking system reform in 2006. The results provide fresh insight on the risks and benefits of political connections in the Chinese real estate market as it transitions from a centrally planned to a market based economy under on-going market oriented banking and political reforms.	en_US
dc.relation.ispartof	Journal of Real Estate Finance and Economics	en_US
dc.relation.isbasedon	10.1007/s11146-017-9629-9	en_US
dc.subject.classification	Finance	en_US
dc.title	Political Connections and Corporate Borrowing: an Analysis on the Listed Real Estate Firms in China	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	57	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1504 Commercial Services	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building/School of Built Environment
utslib.copyright.status	closed_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	57	en_US

Abstract:

© 2017, Springer Science+Business Media, LLC. This paper investigates the relationship between political connections and corporate borrowing behaviour using the listed real estate development firms in China from 2001 to 2014. Evidence from China is of particular importance due to China being the world’s largest emerging and transition economy. We find that the benefit of political connections is manifested in firms obtaining loans from state-controlled banks in the first instance, but that political influence diminishes over subsequent loan extensions. The performance based requirement prevents banks providing systemic favourable treatment to the connected real estate firms, especially after the Chinese banking system reform in 2006. The results provide fresh insight on the risks and benefits of political connections in the Chinese real estate market as it transitions from a centrally planned to a market based economy under on-going market oriented banking and political reforms.

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http://hdl.handle.net/10453/121876