Corporate social responsibility (CSR) and stakeholder engagement have become increasingly important in the global economy. Socially responsible firms take their engagement with stakeholders seriously. Yet, the military, a very important stakeholder in Thailand is rarely investigated. Motivated by this and the importance of CSR and stakeholder engagement, we explore whether and which channels of military ties influence firm performance in the Thai stock market. To alleviate potential endogeneity and omitted variables concerns, we adopt two stages of least square instrumental‐variable analysis. Consistent with resource dependency theory, we find military ties increase firm performance and the influence of military ties is much stronger during the military‐led government. In general market conditions, this relation is in fact driven by the indirect ties through the training of the National Defence College of Thailand (NDCT). However, during military‐led government, the ties through NDCT worsen firm performance while direct military ties increase firm performance.

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