Exposure to Provincial and National Information and Firm Performance: Crisis Period Evidence from China

Abstract

This paper examines the impact of exposure to provincial and national information on the performance of non-financial Chinese firms during the recent global financial crisis (2007 to 2009). The results show that firms with higher level of exposure to provincial information are affected less by the crisis than firms with higher level of exposure to national information. The results are also robust across various proxies of firm performance. The main contribution of this paper is to highlight sources of value for Chinese firms during the recent financial crisis. More importantly, this paper uses publicly available information to draw attention on the role played by national and provincial sources of information in defining firm performance during the recent global financial crisis.