Politically Connected Firms: An International Event Study
Speaker
Abstract
| We investigate the impact that the political connections of publicly traded firms have on their performance and risk-taking. Using a long-term event study covering a sample of 234 politically connected firms headquartered in 12 developed and 11 developing countries over the period 1989 to 2003, we find that firms increase their performance and risk-taking after the establishment of a political connection. We also find that the political connection is more valuable for firms with closer ties to political power. Overall, our study confirms that politically connected firms gain easier access to credit and reap benefits in terms of performance from their ties with politicians. |
| Contact information: |
| Myra Lissenberg |
