Government protection, political connection and management turnover in China

Tsz Wan Cheng, T. Y. Leung

Research output: Journal article publicationJournal articleAcademic researchpeer-review

32 Citations (Scopus)


Mainland Chinese government employs two related strategies to protect its national and economic interests in the process of financial liberalization. It grants government protection to industries of national interest. In addition, it also maintains political-linkage with certain firms to assert their influence. We term these firms as strategic firms. We argue these strategic firms with economic and national interests demonstrate better performance and higher management turnovers. Management turnovers are less frequent if the chairpersons and CEOs are politically-connected. The strategic firms also rebound better from financial distress than non-strategic firms.
Original languageEnglish
Pages (from-to)160-176
Number of pages17
JournalInternational Review of Economics and Finance
Publication statusPublished - 1 Sept 2016


  • Government protection
  • Management turnover
  • Political connection
  • Strategic firm

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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