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Political Connection, Management Promotion and Risk Taking Activities

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DOI: 10.4236/me.2014.57071    2,455 Downloads   3,153 Views   Citations

ABSTRACT

This paper investigates how political connection and management promotion affect chances of risk-taking activities, in order to offer theoretical support for state-owned enterprises to select optimal managers, and to maintain and increase their company values. Using the data of chairman of state-owned listed enterprises in Shenzhen securities market, we find that in state-owned listed enterprises, the shorter the pyramid of listed enterprises to ultimate shareholders is, the closer the political connection is, the more likely the chairman is to take up risk-taking activities for promotion. While for the same pyramid, the longer the tenure of chairman, the more chances of risk-taking activities.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Zhao, Q. , Wang, S. and Chen, C. (2014) Political Connection, Management Promotion and Risk Taking Activities. Modern Economy, 5, 774-784. doi: 10.4236/me.2014.57071.

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