Executive political connections and firm performance: Comparative evidence from privately-controlled and state-owned enterprises

The Effect of Political Connections on the Firm Performance in a Newly Democratised Country

“…The coefficients associated with the political connections variable are positive and statistically significant. The positive association between performance and political connections has been proved by Ang et al 2013;Goldman et al 2009;Coulomb and Sangnier 2014;Ding et al 2014 andLi et al 2008. Similarly, these results are consistent with the theoretical predictions.…”

“…Ang et al (2013) show that political connections have a positive effect on the value of the firm by considering the case of Singapore. However, Ding et al (2014) confirm this same positive effect by taking the case of China.…”

“…Indeed, this impact has appealed the attention of several studies around the world. Among the ones who have found a positive effect we can cite (Faccio 2006 ;Goldman et al 2009 ;Boubakri et al 2012 ;Ang et al 2013 ;Coulomb and Sangnier 2014 ;Ding et al 2014 ;Ling et al 2016 ;Rijkers et al 2017). On the other hand, some others have found a negative effect such as Fisman 2001;Roberts 1990, Faccio and Parsley 2009, Faccio 2010Saeed et al 2015.…”

Board Characteristics, Political Connections, and Corporate Cash Holdings: The Role of Firm Size and Political Regime

“…Yeh, Shu, and Chiu (2013) also argued that in weak corporate governance, political connections can be used as a substitute for obtaining better firm performance. Due to these inclusive results of political connections (Jackowicz, Kozłowski, & Mielcarz, 2014), its effect on corporate governance (Ding, Jia, Wu, & Zhang, 2014), and the joint effect of political connections and corporate governance are rarely being studied (Shen et al, 2015). Also, as reported by (Ding et al, 2014, p. 2), "most prior studies of political connections have left the effects of these connections on corporate governance unexamined".…”

A Recent Literature Review on Corporate Political Connections

“…For instance, Wu et al (2012) find that Chinese private firms having politically connected managers have better performance than non-connected firms. Ding et al (2014) partially find that having politicians on the board help improve firm performance particularly in the stateowned enterprises. Similarly, A paper of Brown (2016), studying air transportation firms, reveals that firms with intensive political activity and political connections, subsequently, have higher profitability.…”