Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/31796
Title: Cost of government and firm value
Authors: Firth, M
Gong, SX 
Shan, L
Keywords: Cost of government
Efficiency
Firm value
Grabbing hand
Political economy
Productivity
Issue Date: 2013
Publisher: Elsevier Science Bv
Source: Journal of corporate finance, 2013, v. 21, no. 1, p. 136-152 How to cite?
Journal: Journal of Corporate Finance 
Abstract: Do high expenditures incurred in running the government benefit or hurt firms? Using Chinese data between 1999 and 2006, we find that higher administrative expenditures in provincial governments are associated with lower firm value, lower stock and financial performance, and lower labor productivity. Local governments that spend more on public administration tend to collect more fees from companies and spend less on social welfare and infrastructures. Our evidence is consistent with the "grabbing hand" hypothesis and has important policy implications.
URI: http://hdl.handle.net/10397/31796
ISSN: 0929-1199
DOI: 10.1016/j.jcorpfin.2013.01.008
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