Political connections of independent directors and firm internationalization: An empirical study of Chinese listed firms

摘要

Using Chinese A-share listed sample firms, we find a significantly positive association between independent directors' political connections and firm internationalization. This association is more pronounced in firms in western regions of China compared to that in firms in eastern regions of China. We also find that the Chinese government's recent adoption of anti-corruption practices increases the probability of firm internationalization. However, independent directors' political connection would promote firm internationalization only in firms where the top manager does not has political connections or in non-state-owned firms, indicating that top managers' political connections may play an inhibitory effort on firm internationalization, and there is to some extent a substitution effect between state ownership and independent directors' political connections in promoting firm internationalization.