Political connection and credit risk of real estate enterprises: evidence from stock market
Abstract Although extensive research has examined the credit risk of real estate enterprises, the relationship between the political connection of real estate enterprises and these enterprises’ credit risk has not been formally studied. Using the panel data of 123 real estate listed companies in the...
| Main Authors: | , , , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Springer Nature
2024-01-01
|
| Series: | Humanities & Social Sciences Communications |
| Online Access: | https://doi.org/10.1057/s41599-023-02522-z |
| _version_ | 1797276712032010240 |
|---|---|
| author | Rongda Chen Jingjing Yu Chenglu Jin Xinyang Chen Liu Yang Shuonan Zhang |
| author_facet | Rongda Chen Jingjing Yu Chenglu Jin Xinyang Chen Liu Yang Shuonan Zhang |
| author_sort | Rongda Chen |
| collection | DOAJ |
| description | Abstract Although extensive research has examined the credit risk of real estate enterprises, the relationship between the political connection of real estate enterprises and these enterprises’ credit risk has not been formally studied. Using the panel data of 123 real estate listed companies in the Chinese stock market from 2008 to 2021, this paper finds a significant positive correlation between the political connection of private real estate listed companies and their credit risk. This phenomenon is attributed to the excessive debt that benefits from political connections since it may raise the credit risk of any real estate firm. Interestingly, considering that 2013 is the first year of China’s Internet finance era, we find that the popularity of Internet finance and other decentralized lending financing channels may enhance the impact of political connections on real estate credit risk. Our findings provide new micro evidence for the influencing factors and mechanism of credit risk of real estate enterprises during the recent “credit crisis” in the real estate market in China. |
| first_indexed | 2024-03-07T15:32:09Z |
| format | Article |
| id | doaj.art-e238ff6a6bd34e17a6121c28ae247fe3 |
| institution | Directory Open Access Journal |
| issn | 2662-9992 |
| language | English |
| last_indexed | 2024-03-07T15:32:09Z |
| publishDate | 2024-01-01 |
| publisher | Springer Nature |
| record_format | Article |
| series | Humanities & Social Sciences Communications |
| spelling | doaj.art-e238ff6a6bd34e17a6121c28ae247fe32024-03-05T16:23:12ZengSpringer NatureHumanities & Social Sciences Communications2662-99922024-01-0111111210.1057/s41599-023-02522-zPolitical connection and credit risk of real estate enterprises: evidence from stock marketRongda Chen0Jingjing Yu1Chenglu Jin2Xinyang Chen3Liu Yang4Shuonan Zhang5School of Finance, Zhejiang University of Finance and EconomicsSchool of Finance, Zhejiang University of Finance and EconomicsSchool of Finance, Zhejiang University of Finance and EconomicsSchool of Finance, Zhejiang University of Finance and EconomicsBusiness School, University of International Business and EconomicsSchool of Finance, Zhejiang University of Finance and EconomicsAbstract Although extensive research has examined the credit risk of real estate enterprises, the relationship between the political connection of real estate enterprises and these enterprises’ credit risk has not been formally studied. Using the panel data of 123 real estate listed companies in the Chinese stock market from 2008 to 2021, this paper finds a significant positive correlation between the political connection of private real estate listed companies and their credit risk. This phenomenon is attributed to the excessive debt that benefits from political connections since it may raise the credit risk of any real estate firm. Interestingly, considering that 2013 is the first year of China’s Internet finance era, we find that the popularity of Internet finance and other decentralized lending financing channels may enhance the impact of political connections on real estate credit risk. Our findings provide new micro evidence for the influencing factors and mechanism of credit risk of real estate enterprises during the recent “credit crisis” in the real estate market in China.https://doi.org/10.1057/s41599-023-02522-z |
| spellingShingle | Rongda Chen Jingjing Yu Chenglu Jin Xinyang Chen Liu Yang Shuonan Zhang Political connection and credit risk of real estate enterprises: evidence from stock market Humanities & Social Sciences Communications |
| title | Political connection and credit risk of real estate enterprises: evidence from stock market |
| title_full | Political connection and credit risk of real estate enterprises: evidence from stock market |
| title_fullStr | Political connection and credit risk of real estate enterprises: evidence from stock market |
| title_full_unstemmed | Political connection and credit risk of real estate enterprises: evidence from stock market |
| title_short | Political connection and credit risk of real estate enterprises: evidence from stock market |
| title_sort | political connection and credit risk of real estate enterprises evidence from stock market |
| url | https://doi.org/10.1057/s41599-023-02522-z |
| work_keys_str_mv | AT rongdachen politicalconnectionandcreditriskofrealestateenterprisesevidencefromstockmarket AT jingjingyu politicalconnectionandcreditriskofrealestateenterprisesevidencefromstockmarket AT chenglujin politicalconnectionandcreditriskofrealestateenterprisesevidencefromstockmarket AT xinyangchen politicalconnectionandcreditriskofrealestateenterprisesevidencefromstockmarket AT liuyang politicalconnectionandcreditriskofrealestateenterprisesevidencefromstockmarket AT shuonanzhang politicalconnectionandcreditriskofrealestateenterprisesevidencefromstockmarket |