The Communist Party of China embedded in corporate governance and enterprise value: Evidence from state-owned enterprises

The most prominent feature of the Chinese corporate system is the establishment of the Communist Party Committee (CPC) in state-owned enterprises. We empirically investigate how the CPC's involvement in corporate governance affects enterprise value using a panel model and mediation effect model based on data from A-share listed companies from 2007 to 2020. The results show that CPC involvement can significantly increase enterprise value but only for central state enterprises. The potential mechanism through which CPC influence can increase enterprise value is by alleviating financing constraints and reducing the implicit corruption of executives.