Corporate Politics, Governance, and Value Before and After <i><scp>C</scp>itizens <scp>U</scp>nited</i>

Coates IV, John C.

doi:10.1111/j.1740-1461.2012.01265.x

Cited by 142 publications

(23 citation statements)

References 103 publications

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“…However, surprisingly, the effect of political connections on PER is significant but negative. This result confirms the findings of Kim (2008) and Coates (2012) which reveal the presence of agency costs. Hence, political connection creates agency problems within firms which reduce the price earnings ratio.…”

Section: Robustness Analysissupporting

confidence: 91%

Political connections, related party transactions and firm performance: evidence from Tunisian context

Cheikh

Loukil

2022

JAEE

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PurposeThe purpose of this paper is to examine the effect of the presence of political connections on firm performance through related party transactions in Tunisia, a country where that is characterized by the Jasmin revolution in 2011.Design/methodology/approachThe study uses a sample of nonfinancial firms between 2008 and 2014 listed on the Tunis Stock Exchange and uses generalized least squares on panel data.FindingsFirst, the political connection and related parties' transaction enhances firm's market performance. Second, the study reveals that political connection moderates the relationship between the related party transactions and firm performance only in the period after revolution. Indeed, politicians seem to have used related party transactions to expropriate firms in a period of political instability. Finally, we show that politicians are more attracted by firms with higher market performance and with higher number of related parties' transactions.Practical implicationsThe empirical findings contribute to the current debate on the benefits and costs of political connections in emerging economies. It shows that political connections enhance market valuation of firms. However, political connection costs appear during political instability period.Originality/valueThis study addresses the interaction between related party transactions, political connections and firm performance. It is the first study to test if the related party transactions are used as a tool by politicians to expropriate firms.

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Section: Robustness Analysissupporting

confidence: 91%

Political connections, related party transactions and firm performance: evidence from Tunisian context

Cheikh

Loukil

2022

JAEE

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“…The lobbying expenditure and the political donations are different forms of political investment with regards to their influence and scale of expenditure (Yu and Yu 2011;Aggarwal et al 2012). Coates (2012) also observed a negative effect of the lobbying activities on the corporate value.…”

Section: Negative Associationmentioning

confidence: 92%

Do Firm’s Organisational Slacks Influence the Relationship between Corporate Lobbying and Corporate Financial Performance? More Is Not Always Better

Lin

2018

IJFS

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A political involvement in any organisation has often proved to be profitable for such firms that are seeking support and favourable regulatory conditions. Though many studies have investigated the effect of the corporate lobbying activities on the organisations, no clear results have been achieved. In this study, we have investigated the lobbying expenditure of some of the most famous United States (US)-based companies, which support the U.S. government during 2007–2016. Primarily, we tested the relationship between the corporate lobbying and the Corporate Financial Performance (CFP), with the help of a dynamic panel data analysis, which is based on the System Generalised Methods of the Moment (SYS-GMM). The results of this study indicated that the corporate lobbying did not increase the probability of gaining more support from the government in comparison to the firms that did not use any lobbying techniques. Furthermore, the findings showed that corporate lobbying is a component of the zero-sum political agenda that cannot be accurately evaluated and does not contribute towards the improvement of the CFP. This study introduced the important component of organisational slack and noted that the corporate lobbying could significantly destroy the CFP if the organisational slack was high.

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“…The Supreme Court case of Citizens United removed limits on political donations for firms. In response, lobbying and PAC activity of firms increased in both the amount they invested as well as the frequency of investments (Coates, 2012). Firms respond to incentives and opportunities.…”

Section: Bands Firm Experience and Opportunitymentioning

confidence: 99%

How and Why? A Review of Corporate Political Activity Predictors and Actions

Brown

Rasheed

Bell

2022

Group & Organization Management

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In this review, we provide a framework for understanding both the predictors and approaches of CPA that firms undertake to achieve their objectives. We identify the predictors of CPA and classify them into two distinct categories: internal and external. In addition, we suggest that CPA approaches will vary depending on the firm’s goal to either manage or mitigate regulation and legislation as compared to attempting to pass new bills into law. We conclude by suggesting several future CPA research directions for management scholars.

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Corporate Politics, Governance, and Value Before and After Citizens United

Cited by 142 publications

References 103 publications

Political connections, related party transactions and firm performance: evidence from Tunisian context

Political connections, related party transactions and firm performance: evidence from Tunisian context

Do Firm’s Organisational Slacks Influence the Relationship between Corporate Lobbying and Corporate Financial Performance? More Is Not Always Better

How and Why? A Review of Corporate Political Activity Predictors and Actions

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