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An Empirical Study On The Impact Of Independent Directors' Political Connection On Corporate Misbehavior

Posted on:2020-04-21Degree:MasterType:Thesis
Country:ChinaCandidate:S LiangFull Text:PDF
GTID:2416330599964620Subject:Accounting
Abstract/Summary:PDF Full Text Request
In the past 30 years since the establishment of China's capital market,the number of listed companies has been increasing and developing rapidly.However,it is accompanied by the lag of relevant laws,which leads to frequent corporate misbehavior.Corporate misbehavior has a great impact on the capital market,so exploring the factors affecting corporate misbehavior has become a hot topic in academic circles.A large number of scholars in China have explored the influencing factors of corporate misbehavior from the internal and external environment,such as the internal board structure and the external institutional environment.This paper is based on the fact that our country is in the stage of economic transition.In this stage,due to the imperfection of formal system,it is of great significance to explore the impact of the informal system of political connection on corporate misbehavior.Since 2001,China has formally introduced the independent director system.On the premise of the continuous development and standardization of the independent director system,it is beneficial to explore the impact of its political connection on corporate misbehavior,whether in terms of understanding the functions of independent directors or the influencing factors of corporate misbehavior.This paper studies the impact of independent directors' political connection on corporate misbehavior,using empirical and normative methods.By selecting 3387 A-share listed companies in Shanghai and Shenzhen stock exchange from 2008 to 2017 as the research sample,this paper empirically tests the impact of independent directors' political connection on corporate misbehavior by using regression model.After distinguishing the nature of enterprise property rights,this paper examines the different effects of political connections between independent directors in state-owned enterprises and non-state-owned enterprises on corporate misbehavior.In addition,considering the regulatory role of the level of rule of law,after examining the regulatory role of the level of rule of law on the impact of independent directors' political connection on corporate misbehavior,this paper again distinguishes the nature of enterprise property rights,and then examines whether the regulatory role of the level of rule of law functions in the same way the in state-owned enterprises and non-state-owned enterprises.The results show that,firstly,the political connection of independent directors is negatively correlated with corporate misbehavior.From the perspective of the probability of corporate misbehavior,the stronger the political connection of independent directors,the smaller the probability of corporate misbehavior;and from the perspective of the degree of corporate misbehavior,the stronger the political connection of independent directors,the lower the degree of corporate misbehavior.Secondly,after distinguishing between state-owned enterprises and non-state-owned enterprises,it is found that,compared with state-owned enterprises,the political connection of independent directors of non-state-owned enterprises can reduce the probability and degree of corporate misbehavior more.After adding the regulatory variable of rule of law level,it is found that in areas with high level of rule of law,the influence of independent directors' political connection on the probability and degree of corporate misbehavior is smaller,that is,the high level of rule of law weakens the influence of independent directors' political association on the probability and degree of corporate misbehavior.Finally,the regulatory role of the level of rule of law is distinguished between state-owned enterprises and non-state-owned enterprises,and it is found that,compared with state-owned enterprises,the regulatory role of the level of rule of law on the impact of the political connection of independent directors in non-state-owned enterprises on the probability and degree of corporate misbehavior is more obvious.In the end,this paper summarizes the main contributions as well as the shortcomings of the research,so as to put forward some new ideas for future research directions.
Keywords/Search Tags:Independent Directors, Political Connection, Corporate Misbehavior
PDF Full Text Request
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