Real Estate & Planning Research Seminar by Professor Rose Neng LAI, University of Macau. Title: "Under the radar: The role of subsidiaries in concealing political connections in Chinese land transactions".

If you are interested in attending this Seminar please contact our Department School Office at repschooloffice@reading.ac.uk

Abstract:

This paper provides evidence that politically connected firms in China conceal their political favors through the use of subsidiaries. While the headquarters of these connected listed firms pay land prices comparable to those of other firms, their subsidiaries receive significant discounts, ranging from 12.1% to 13.2%. These discounts are more pronounced when land is acquired through non-transparent methods or in regions with weak institutional environments. Additionally, larger charitable donations often precede greater discounts for subsidiaries, indicating a reciprocal relationship between firms and officials. The anti-corruption campaign has effectively reduced discounts associated with corruption but has intensified those linked to government subsidies. These findings illustrate how firms discreetly leverage political connections and hide their rent-seeking behavior through complex corporate structures. This study contributes to understanding how political connections distort resource allocation, particularly in contexts with weak regulatory frameworks.

Bio: Rose Neng LAI is Professor of Finance, and the MBA Programme Director of the Faculty of Business Administration of the University of Macau, and the Dean of the Honours College of the University since 2019. She was a Visiting Fellow in 2010 and is the Life Member of the Clare Hall of the University of Cambridge. She runs the Executive Director Office for the Asian Real Estate Society, for which she was the President in 2007, as well as executive director and the past President (2012) of the Board of the Global Chinese Real Estate Congress. She has also sat on various committees in international Associations such as the AREUEA and the ARES, and academic search/promotion committees for various universities such as University of Cambridge, University College London and University of Melbourne. Her research in real estate finance and economics, behavioral finance, and risk management has been published in the Real Estate Economics, the Journal of Real Estate Finance and Economics, the Journal of Empirical Finance, the Journal of Real Estate Research, and others, as well as in her book with Robert Van Order entitled “When Housing Markets Meet Shadow Banking”. She won the 2019 International Real Estate Society Achievement Award, and the 2017 Edwin Mills Best Paper Award. She is currently the Executive Editor of the International Real Estate Review. She has also led several government consultancy projects, joined think-tanks and committees for expert opinions, and consulted by international bodies. She earned her BBA from the University of East Asia (predecessor of the University of Macau), MBA from the Simon Fraser University, Canada, and her PhD in Finance from the Chinese University of Hong Kong.