We study how political power affects resource allocation for knowledge production dictated by central planning in a non-market system in China. Our empirical results suggest that scholar with political privilege is associated with 15.7% more allocation granted by the National Natural Science Foundation of China (NSFC), especially towards applicants with high political hierarchy. Weaker institutional environment, less reputable universities and hard-to-value project determine variations in grant allocation related to political privilege. Further analysis suggests that access to NSFC fund not only benefits scholars themselves, but also more high-impact publications for the institute, indicating that political favoritism produces positive spillover effect.
{"title":"Political Favoritism Towards Resource Allocation","authors":"Zihua Liu, Sili Zhou","doi":"10.2139/ssrn.3334825","DOIUrl":"https://doi.org/10.2139/ssrn.3334825","url":null,"abstract":"We study how political power affects resource allocation for knowledge production dictated by central planning in a non-market system in China. Our empirical results suggest that scholar with political privilege is associated with 15.7% more allocation granted by the National Natural Science Foundation of China (NSFC), especially towards applicants with high political hierarchy. Weaker institutional environment, less reputable universities and hard-to-value project determine variations in grant allocation related to political privilege. Further analysis suggests that access to NSFC fund not only benefits scholars themselves, but also more high-impact publications for the institute, indicating that political favoritism produces positive spillover effect.","PeriodicalId":445962,"journal":{"name":"Mostly Finance","volume":"240 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132882855","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the effect of product market threats on firms’ stock crash risk. Competitive pressure from the product market aggravates managers’ incentive to withhold negative information. When negative information is accumulated to a tipping point, the accumulated information comes out all at once and leads to an abrupt and large decline in stock price. Using a measure of product market threats, our regressions find that firms facing more threats are more prone to stock crashes. This result is confirmed by an instrumental variable analysis and a difference-in-difference analysis with an exogenous shock to market competition. This paper was accepted by Neng Wang, finance.
{"title":"Product Market Threats and Stock Crash Risk","authors":"Si Li, Xintong Zhan","doi":"10.2139/ssrn.2474135","DOIUrl":"https://doi.org/10.2139/ssrn.2474135","url":null,"abstract":"This paper examines the effect of product market threats on firms’ stock crash risk. Competitive pressure from the product market aggravates managers’ incentive to withhold negative information. When negative information is accumulated to a tipping point, the accumulated information comes out all at once and leads to an abrupt and large decline in stock price. Using a measure of product market threats, our regressions find that firms facing more threats are more prone to stock crashes. This result is confirmed by an instrumental variable analysis and a difference-in-difference analysis with an exogenous shock to market competition. This paper was accepted by Neng Wang, finance.","PeriodicalId":445962,"journal":{"name":"Mostly Finance","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116035764","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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