Abstract
Based on the sample of listed companies in strategic emerging industries between 2007 and 2014 of China Shanghai and Shenzhen Stock Market, this paper tested the effect of the change of the local prefecture level city mayor and party secretary on corporate investment, and further studies differentiated different enterprise types. The results indicated that the change of prefecture level city party secretary will lead to the significant increase of strategic emerging industries listed companies investment and this effect occurs only in the second year; we have not found significant effect of the change of the local prefecture level city mayor. Further, this paper limited examples. We found that the investment of state-owned enterprises were influenced significantly by the change of prefecture level city party secretary and this effect lagged one phase, major’s turnover had no significant effect. Higher market degree companies and higher government subsidies companies showed similar results. The result of his paper has enriched the study of the relationship between local officials’ change and corporate investment.
Highlights
The State Council issued “Decision on accelerating the cultivation and development of strategic emerging industry” on October 8, 2010, which clearly pointed out that the strategic emerging industry is an important force in China’s economic and social development in the future
The results indicated that the change of prefecture level city party secretary will lead to the significant increase of strategic emerging industries listed companies investment and this effect occurs only in the second year; we have not found significant effect of the change of the local prefecture level city mayor
We found that the investment of state-owned enterprises were influenced significantly by the change of prefecture level city party secretary and this effect lagged one phase, major’s turnover had no significant effect
Summary
The State Council issued “Decision on accelerating the cultivation and development of strategic emerging industry” on October 8, 2010, which clearly pointed out that the strategic emerging industry is an important force in China’s economic and social development in the future. .As an important part of the local economy, the economic behaviors of strategic emerging industry listed companies are inevitable to be affected by the changes of government officials. The strategic emerging industries as a special category of listed companies, whether local officials’ change will affect their investment behavior? Based on the above analysis, this paper uses strategic emerging industries listed company data from 2007 to 2014, analyzing the influence of the prefecture level city mayor, Party Secretary of the change occurred in the industry of listed companies investment spending. The conclusion shows that the change of prefecture level city party secretary will lead to the significant increase of strategic emerging industries listed companies investment and this effect occurs only in the second year, we have not found significant effect of the change of the local prefecture level city mayor. The rest of this paper are organized as follows: Section 2 is the literature review; Section 3 is the research design of concrete; Section 4 is descriptive statistics and empirical results to illustrate the robustness test; Section 5 makes a conclusion
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