Do political connections enhance or impede corporate innovation?

Su, Zhong‐qin; Xiao, Zuoping; Yu, Lin

doi:10.1016/j.iref.2018.08.012

Cited by 91 publications

(40 citation statements)

References 76 publications

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“…For example, Jia et al [48] showed that the managers of politically connected firms are shielded from legal prosecutions, and such firms are less likely to purchase insurance in emerging and developing countries. Bona-Sánchez et al [49] argued that politically connected firms tend to have more process innovation, and that logically creative accounting innovation is an inclusive category [16]. Previous research exploring the link between political connections and creative accounting practices has not considered primary data and contextual factors, e.g., Jordan.…”

Section: Discussionmentioning

confidence: 99%

“…Politically connected firms are more likely to complete a cross-border transaction than their unconnected counterparts, but at the cost of poorer performance [15]. Advocates have argued that politically connected firms are more likely to be innovative due to government subsidies [16], have abundant disposable resources, and are likely to be top performers [17]. The conflict in the literature suggests that more research is needed to examine the relevance of political connections for creative accounting, quality of accounting reports, and decision-making effectiveness.…”

Section: Introductionmentioning

confidence: 99%

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The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes

Ababneh

Ağa

2019

Sustainability

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Decision-making and financial information quality are key facets of corporate sustainability. The literature is devoid of inquiries investigating the collective impact of sustainable financial data governance and political connections on creative accounting practices, the quality of financial reporting and decision-making effectiveness. The present study integrates these critical factors by obtaining survey data (n = 180) from publicly listed firms in Amman Stock Exchange, Jordan. By applying partial least squares structural equation modeling (PLS-SEM), this study found that (i) sustainable financial data governance does not influence creative accounting practices, (ii) political connections influences the level of firms creative accounting practices, (iii) creative accounting practices influences the quality of financial and accounting information reporting, and (iv) the quality of financial and accounting information reporting influences firms decision-making effectiveness. Implications, limitations, and future research courses are discussed.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes

Ababneh

Ağa

2019

Sustainability

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“…However, there is no evidence indicating that this instrument directly affects firms' pollution discharges (Su et al, 2018). We firstly regress the indicator variable for political connections on the instrumental variable and other control variables.…”

Section: Endogeneity Testsmentioning

confidence: 99%

“…Following Kato & Long (2006),Donelli et al (2013) andSu et al (2018), we divide the firms into SOEs and non-SOEs according to their ultimate controllers. SOEs are usually defined as firms whose ultimate controllers are the state while non-SOEs are defined as firms whose ultimate controllers are others.…”

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confidence: 99%

Political Connections and Firm Pollution Behaviour: An Empirical Study

Deng

2020

Environ Resource Econ

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A firm's top manager and a government official may be connected due to special circumstances. This social relationship or political connection may provide industrial polluters with protection or a "pollution shelter" which could lead to severe environmental deterioration. This paper aims to examine the link between political connections and firms' pollution discharges by using Chinese data. Empirical results show that political connections are the institutional origin for firms to adopt strategic pollution discharges. Government officials who are young, of low education, promoted locally and in office for a relatively long time are more likely to build political connections with polluters. This phenomenon may lead to inadequate enforcement of regulation and emission control. The pollution discharge of politically connected firms also varies considerably due to firm heterogeneity. This study also shows that pollution shelter effects caused by political connections are more obvious in the central and western regions, prefecture cities and capital-intensive industries.

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“…One study conducted in Canada by Morck et al (2000) finds that large business family firms get benefits from the government by utilizing unlimited resources. Corporate political connections affects the innovation process in the firms and enhance the innovative activities (Krammer and Jimenez, 2020;Su et al, 2019;Cheng et al, 2019). Developed economies also present firms with political connections, according to studies of the U.S. economy by Goldman et al (2009) and Cooper et al (2010).…”

Section: Introductionmentioning

confidence: 99%

Impact of Corporate Political Connections on Cost of Equity: A Dynamic Panel Approach

Amanat

Hunjra

Qureshi

et al. 2021

NRJSS

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We analyze the impact of corporate political connections on the cost of equity of non-financial firms listed at the Pakistan Stock Exchange. We extract data from the DataStream and Election Commission of Pakistan for the years 2001 to 2018. The Generalized Method of Moments is used for data analysis. This research finds that firms use political connections to enjoy a lower cost of equity capital. Further, firms with strong ties to political power obtain more benefits on financing cost as compared to non-connected firms. Besides, we also find that firms affiliated with a large business group enjoy a lower cost of equity than non-affiliated connected firms. The findings may be helpful for regulators to formulate suitable policies concerning the use of corporate political strategies and to assist unconnected and non-affiliated firms to access finance easily.

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Do political connections enhance or impede corporate innovation?

Cited by 91 publications

References 76 publications

The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes

The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes

Political Connections and Firm Pollution Behaviour: An Empirical Study

Impact of Corporate Political Connections on Cost of Equity: A Dynamic Panel Approach

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