The impact of managerial political ties on corporate governance and debt financing: Evidence from Ghana

Liedong, Tahiru Azaaviele; Rajwani, Tazeeb

doi:10.1016/j.lrp.2017.06.006

Cited by 65 publications

(76 citation statements)

References 119 publications

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“…"For political engagements to be ethical, they must favour and support more people and systems than they destroy" (N1). This view reflects recent evidence of how business-government interactions cause corporate social irresponsibility, create dismal conditions and harm stakeholders in South Africa and Ghana (Hamann et al 2019;Liedong and Rajwani 2018).…”

Section: Strategy Levelsupporting

confidence: 69%

“…Second, business-government relations positively affect Ghana's socio-economic development through their impact on public-private partnerships, policy formulation and capacity building (Amankwah-Amoah et al 2018). However, Ghana suffers institutional weaknesses (Acquaah 2007;, which gives rise to systemic corruption (van den Bersselaar and Decker 2011;Liedong and Frynas 2017) and poor corporate governance practices within politically active firms (Liedong and Rajwani 2018). These problems curtail or negate the promise of CPA and call for ethical business-government relations, which can be achieved by firstly understanding how managers evaluate the ethicality of their political engagements.…”

Section: Introductionmentioning

confidence: 99%

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Responsible Firm Behaviour in Political Markets: Judging the Ethicality of Corporate Political Activity in Weak Institutional Environments

Liedong

2020

J Bus Ethics

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While support for corporate political activity (CPA) is well echoed in the literature, little has been done to empirically examine its ethicality. Moreover, existing ethical CPA frameworks assume normative and rational leanings that are insufficient to provide a comprehensive account of CPA ethicality. Utilizing the Ghanaian context, adopting a multiple case study design involving 28 Directors from 22 firms, and employing a grounded theory approach, I explore how the ethicality of CPA is determined in weak institutional environments. The findings reveal that business executives evaluate ethics at three levels (i.e. context, organizational and strategy) using three principles (i.e. utilitarianism, justice and institutions). Leveraging this knowledge, I present an eclectic framework that bridges the long-standing gap between normative ethical prescriptions and lived ethical realities. In doing so, I move away from abstraction to give "voice" to the actors involved in CPA. I also present a model that shows how the ethical judgement process is influenced by managerial intuition and interactive personal and organizational experiences. This article has important theoretical and practical implications for ethical business-government relations in developing countries.

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Section: Strategy Levelsupporting

confidence: 69%

Section: Introductionmentioning

confidence: 99%

Responsible Firm Behaviour in Political Markets: Judging the Ethicality of Corporate Political Activity in Weak Institutional Environments

Liedong

2020

J Bus Ethics

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“…Similarly, Liedong and Rajwani (2017) find that in Ghana, politically connected firms have higher interest rate. On a different matter, Boubakri et al (2013), in a cross country study, reveal that firms with political connections more cash than firms without such connections.…”

Section: Capital Structure Cost Of Capital Dividend and Liquiditymentioning

confidence: 82%

A Recent Literature Review on Corporate Political Connections

Trinugroho

2017

JDM

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It has always been an interesting issue deliberating the connectedness between corporation and political power. There have been a substantial number of papers in the academic literature empirically studying what so call "corporate political connections" over the last 17 years. Using 81 papers published in 2010-2017 in finance, economics, accounting, management and other journals, in this present paper, I provide a recent literature review on firm political connections particularly with respect to the empirical studies discussing the impact of being politically connected firms. A number of issues related to the effect of political connections on corporate strategy, behaviors and outcomes have been addressed. Few other papers provide different perspective by looking at the antecedents of corporate political connections and the contingency role of such connections. Little is found on the development of new measures of corporate political connections. Finally, it could be suggested that the interaction between political connections and the technological-based business innovation would be an interesting issue to study.

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“…The first factor contributed 31.14% of the total variance (which is less than even half of the total variance), thus suggesting that a single factor problem does not affect the data. Sixth, even though it was difficult to obtain secondary data, we triangulated some of the primary data such as firm age and firm size using information from secondary sources such as company websites and reports (Liedong and Rajwani 2017). Finally, we included moderation effects in the analyses to reduce the effect of CMV, as complex interactions are not predicted by CMV (Chang et al 2010).…”

Section: Validity and Reliabilitymentioning

confidence: 99%

Investment Climate Constraints as Determinants of Political Tie Intensity in Emerging Countries: Evidence from Foreign Firms in Ghana

Liedong

Frynas

2018

Manag Int Rev

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Foreign firms in emerging countries face various institutionally-driven challenges. Nonmarket strategy scholars argue that these challenges incite corporate political activity. Consequently, researchers have explored the influence of institutional factors on the choice and extent of political strategies. However, not much is known about how investment climate constraints affect the political ties of foreign firms in contexts other than US, Europe and Asia. Drawing on institutional theory, we propose that firms' exposure to administrative and control constraints as well as the presence of public affairs (PA) functions will lead to political tie intensification. We test our propositions using data from foreign firms operating in Ghana, and find that whereas control constraints strengthen political ties, administrative constraints weaken these ties. The findings also suggest that PA functions and political ties can be substitutes, not complements, depending on the institutional contingencies. Altogether, our study enhances knowledge and understanding of how institutional environments and organizational structures affect the political behaviour of foreign firms in emerging countries.

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The impact of managerial political ties on corporate governance and debt financing: Evidence from Ghana

Cited by 65 publications

References 119 publications

Responsible Firm Behaviour in Political Markets: Judging the Ethicality of Corporate Political Activity in Weak Institutional Environments

Responsible Firm Behaviour in Political Markets: Judging the Ethicality of Corporate Political Activity in Weak Institutional Environments

A Recent Literature Review on Corporate Political Connections

Investment Climate Constraints as Determinants of Political Tie Intensity in Emerging Countries: Evidence from Foreign Firms in Ghana

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