تأثیر ارتباطات سیاسی بر عملکرد و ارزش شرکت ها
Abstract
Introduction
Institutional framework
Literature synthesis
Theoretical background: political connections and companies’ performance and value
Methodology
Empirical results
Conclusion
References
Abstract
Purpose: The purpose of this paper is to examine the effect of companies’ political connections (PCs) on their financial and stock performance, as well as on their market values.
Design/methodology/approach A sample of non-financial companies listed on the Tunis Stock Exchange (TSE) between 2012 and 2014 was used. The accounting and financial data of these companies were obtained from their financial statements, whereas data on PCs of their officers and directors were collected manually from various sources. Correlation and multivariate regression analyses were performed to test the hypothesis of this research.
Findings: The results showed that PCs improve companies’ performance and value. These results could be explained, on the one hand, by the benefits and favors that companies can get from their political ties and, on the other hand, by investors’ tendency to invest in politically connected companies to benefit from these advantages.
Introduction
In many countries, politicians are famous entrepreneurs and wealthy businessmen[1]. This interaction between politics and business has been explained by the benefits generated for both politicians and businesses. According to Brogaard et al. (2015), the existence of a political power in the company helps its officers and directors have an impact on laws and regulations and gives them access to inside information, which enables them to anticipate economic changes and reduce uncertainty. On the other hand, the entry to the world of business allows politicians to receive financial support during periods of elections, essentially in the form of donations. The entry of several politicians into the business world (or several businessmen in the political arena) encouraged some researchers to study the impact of political connections on the quality of financial statements (Chaney et al., 2011), the financial analysts’ forecasts (Chen et al., 2010), the cost of equity (Boubakri et al., 2012a), the characteristics of corporate governance (You and Du, 2012), the social responsibility strategies (Lin et al., 2014), and financing decisions (Boubakri et al., 2012b).