Political Connections, Corporate Transparency, and Investor Protection

Abstract

This paper examines the impact of political connections of listed companies on the level of investor protection using China A-share listed companies as research samples from 2010 to 2021. The research reveals that corporate political connections can enhance the level of investor protection, and this conclusion holds true after a series of robustness tests. Mediation mechanism tests indicate that political connections, by increasing corporate transparency, contribute to the improvement of investor protection. This study provides important insights for safeguarding investor interests, boosting investor confidence, and reducing the difficulty of corporate financing.