Political connection and credit risk of real estate enterprises
Evidence from stock market
Bibliographic Data
| ID | 22236512 |
|---|---|
| Authors | Rongda Chen (0000-0002-9713-0981, Jiaxing University), Jingjing Yu (0000-0001-8938-4298, Zhejiang University of Finance and Economics), Chenglu Jin (0000-0001-6306-8019, Zhejiang University of Finance and Economics), Xinyang Chen (0000-0002-7401-0135, Zhejiang University of Finance and Economics), Liu Yang (0000-0003-3048-3392, University of International Business and Economics, corresponding author), Shuonan Zhang (0000-0002-8959-5607, Zhejiang University of Finance and Economics) |
| Year | 2024 |
| Volume | 11 |
| Issue | 1 |
| Publication date | 2024-01-26 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Humanities and Social Sciences Communications (JOURNAL) |
| Journal identifiers | ISSN: 2662-9992 • E-ISSN: 2662-9992 |
| Publisher | Springer Science and Business Media LLC (PUBLISHER) |
| DOI | 10.1057/s41599-023-02522-z |
| OpenAlex | W4391258537 |
| Language | EN |
| References cited | 21 |
Although extensive research has examined the credit risk of real estate enterprises, the relationship between the political connection of real estate enterprises and these enterprises’ credit risk has not been formally studied. Using the panel data of 123 real estate listed companies in the Chinese stock market from 2008 to 2021, this paper finds a significant positive correlation between the political connection of private real estate listed companies and their credit risk. This phenomenon is attributed to the excessive debt that benefits from political connections since it may raise the credit risk of any real estate firm. Interestingly, considering that 2013 is the first year of China’s Internet finance era, we find that the popularity of Internet finance and other decentralized lending financing channels may enhance the impact of political connections on real estate credit risk. Our findings provide new micro evidence for the influencing factors and mechanism of credit risk of real estate enterprises during the recent “credit crisis” in the real estate market in China
Business · Credit risk · Economics · Financial economics · Financial system · Political science · Politics · Real estate · Stock market · Corporate Finance and Governance · Credit Risk and Financial Regulations · Engineering · History · Political Influence and Corporate Strategies · Finance
| Highly cited | No |
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