A type of system boundary, e.g. a membrane in biology, a castle in sociology, a typhoon eye in meteorology and a skin and fur on an animal body, is defined as a shell (jieke in…
Abstract
A type of system boundary, e.g. a membrane in biology, a castle in sociology, a typhoon eye in meteorology and a skin and fur on an animal body, is defined as a shell (jieke in Chinese), if the system boundary plays roles of both defending the system and exchanging between the system and its environment. Investigates the system boundary. Derives the entropy balance equation of the shell and deduces the criterion of the exchange ratio entropy which carries material out through the shell of the system from the second law of thermodynamics of the system. Also derives a dynamic equation of the shell from control theory and gives an application of the equation to immigration control by the customs.
Details
Keywords
The purpose of this paper is to research the impact of firms’ political connections on the stock price crash risk.
Abstract
Purpose
The purpose of this paper is to research the impact of firms’ political connections on the stock price crash risk.
Design/methodology/approach
Empirical methodology is used in this study.
Findings
Using a large sample of Chinese firms for the period 2008-2013, the authors find that corporate political connections can reduce the stock price crash risk. When managers are still in politics or firms are in high financial transparency of local governments, the relationship between political connections and the stock price crash risk is weakened. In addition, the authors’ research shows that the corporate political connections influence the stock price crash risk by affecting the speed of confirmation of bad news.
Research limitations/implications
The findings in this study suggest that political connections will affect corporate disclosure.
Practical implications
These results can help senior executives and investors make better decisions to prevent the stock price crash risk.
Originality/value
This paper empirically analyzes the impact of different types of political connections on the stock price crash risk for the first time.