The role of political capital on private equity placement acquisition for Chinese publicly listed private sector enterprises

This paper explores the relationship between various forms of political capital and the private equity placement of publicly listed PSEs. The results show that the political capital of PSEs can significantly affect PEP in the processing time, approval results and scale of financing. Specifically, im...

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Bibliographic Details
Published in:Journal of the Asia Pacific economy 2021-01, Vol.26 (1), p.182-201
Main Authors: Feng, Yedong, Song, Ciheng, Yang, Baili
Format: Article
Language:English
Subjects:
China
Entrepreneurs
Equity
Financing
Ownership
Political capital
Political finance
Political identity
Political participation
Private equity
private equity placement
Private sector
private sector enterprises
Ratings & rankings
Social capital
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Summary:This paper explores the relationship between various forms of political capital and the private equity placement of publicly listed PSEs. The results show that the political capital of PSEs can significantly affect PEP in the processing time, approval results and scale of financing. Specifically, implicit political capital can significantly shorten the processing time, but cannot significantly affect the approval results; however, both partial state ownership and political participation can significantly increase the approval rating. Moreover, partial state ownership has the most powerful effect on the scale of financing. In addition, the analysis of the impact of different levels of entrepreneurs' political identity on PEP applications reveal that as the level of political identity increases, the PEP approval rate is higher.
ISSN:1354-7860
1469-9648
DOI:10.1080/13547860.2020.1739895