Politically connected firms
M Faccio - American economic review, 2006 - aeaweb.org
American economic review, 2006•aeaweb.org
Examination of firms in 47 countries shows a widespread overlap of controlling shareholders
and top officers who are connected with national parliaments or governments, particularly in
countries with higher levels of corruption, with barriers to foreign investment, and with more
transparent systems. Connections are diminished when regulations set more limits on
official behavior. Additionally, I show that the announcement of a new political connection
results in a significant increase in value.
and top officers who are connected with national parliaments or governments, particularly in
countries with higher levels of corruption, with barriers to foreign investment, and with more
transparent systems. Connections are diminished when regulations set more limits on
official behavior. Additionally, I show that the announcement of a new political connection
results in a significant increase in value.
Abstract
Examination of firms in 47 countries shows a widespread overlap of controlling shareholders and top officers who are connected with national parliaments or governments, particularly in countries with higher levels of corruption, with barriers to foreign investment, and with more transparent systems. Connections are diminished when regulations set more limits on official behavior. Additionally, I show that the announcement of a new political connection results in a significant increase in value.
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