The value of political connections: evidence from China's anti-corruption campaign

Abstract We study the value of political connections directors on Chinese boards. build a new dataset that measures to members Politburo via past school ties, and find private firms with politically connected in boardroom get average about 16% higher subsidies over sales per firm (7 million yuan). Connected state-owned enterprises (SOEs) access debt at 11% cheaper cost, which translates into savings close 32 yuan lower interest payments. persisted after anti-corruption campaign (ACC) 2012. It became weaker for cost SOEs, but stronger firms. argue sector increased ACC because they less risky alternative corruption. also show do not perform better.