Political connections, media coverage and firm performance: evidence from an emerging market

Abstract

Purpose The purpose of this study is to investigate the effect of politically connected directors (PCDs), media coverage and their interaction on firm performance in an emerging market economy (UAE). Design/methodology/approach This study relies on the agency theory and the resource dependency theory and uses a panel data set of a sample of non-financial firms listed in the UAE stock market from 2009 to 2016. Data were analyzed using fixed-effects regression. Instrumental variable regression was used to address potential endogeneity. Findings PCDs and media are positively associated with firm performance (ROE and Tobin’s q). Media moderates the PCDs–performance relationship, as the interaction between PCDs and media coverage is negatively associated with firm performance. Under growing media attention, reputational concerns prevent PCDs from using their connections to gain particular advantages to their firms to avoid damaging their image. Practical implications Regulators need to acknowledge and define the roles of PCDs and media in business governance. Originality/value To the best of authors’ knowledge, this study is the first empirical examination testing the effect of the interplay between PCDs and media on firm performance in an emerging market economy such as UAE.

The corporate risk-taking and performance of politically connected firms: evidence from Malaysia

“…Seemingly, capital expenditure has a direct relationship between investment propensity and higher earnings volatility (Hassan and Giouvris, 2019). The shareholder's show considers a sign of good governance if the firm is audited by the top-ranked audit firms (Hassan et al. , 2022).…”

“…Seemingly, capital expenditure has a direct relationship between investment propensity and higher earnings volatility (Hassan and Giouvris, 2019). The shareholder's show considers a sign of good governance if the firm is audited by the top-ranked audit firms (Hassan et al, 2022). Following the premises, we control the big 4 audit firms as the shareholder's perception of good governance will lead to better performance and corporate risk-taking.…”

Politically connected independent supervisory boards and corporate performance during COVID‐19: Evidence from Indonesia

“…The government has better access to lending to politically connected companies thanks to banks with their own political connections. Based on nonfinancial listed firm in the UAE (United Arab Emirates) stock market, Hassan et al (2022) show that political connection enhances business performance. Abdullah et al (2022) state that tax-aggressive firms in Pakistan have politically connected board members and this fact improves their performance.…”

The Influence Of Prospective Political Marketing On The Political Behavior Of Voters In Simultaneous Village Head Elections in Kahu District, Indonesia

“…Political marketing is series activity planned , strategic But Also tactical , dimensional period long And period short , for spread meaning political to selector (Kotler et al, 2018;Suneki et al, 2020). Temporary That's the thing to emphasize in political marketing is use approach And marketing method for help politician or party politics for more efficient as well as effective in build connection two direction with constituents And society (Hassan et al, 2022). In political marketing , which is emphasized is use marketing approach to help politician And party politics for more efficient And effective in build connection two direction with constituents And society (Irshaidat, 2022).…”