Work

Corporate Bond Issuance From Birthplace‐Connected Politicians

Year: 2026

Type: article

Abstract: ABSTRACT While numerous studies examine the impact of political factors on corporate bonds, there is scant literature focusing on the influence of politicians' birthplace favouritism on the likelihood of corporate bond issuance. To address this gap, we leverage turnover events of the chairman of the China Securities Regulatory Commission (CSRC) to identify shifts in regions favoured by politicians. Our findings reveal that firms headquartered in the birthplace of the incumbent CSRC chairman have a higher probability of issuing bonds. Channel analysis indicates that firms issuing bonds and headquartered in the incumbent CSRC chairman's birthplace are more likely to possess lower initial credit ratings and barely meet the CSRC's quantitative thresholds. The birthplace favouritism of politicians in corporate bond issuance is more pronounced among chairmen with strong hometown preferences and less pronounced when concerns about their political careers are high. Furthermore, the positive relationship between politicians' birthplace favouritism and bond issuance likelihood remains unaffected following the anti‐corruption campaign, highlighting that such favouritism is unlikely to be primarily driven by corrupt motives.

Source: International Journal of Finance & Economics

DOI: 10.1002/ijfe.70134

Authors: Senlin Miao, Fenghua Wen, Chufu Wen

Institutions: Nanjing University of Aeronautics and Astronautics, Central South University

Language: English

Topic: Political Influence and Corporate Strategies

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: bronze

Funders: National Natural Science Foundation of China, Fundamental Research Funds for the Central Universities