Politically Connected Firms
Mara Faccio
Purdue University - Krannert School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)
July 13, 2004
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.
JEL Classifications: G3, F30
Working Paper Series
Suggested Citation
Faccio, Mara, Politically Connected Firms (July 13, 2004). Available at SSRN: http://ssrn.com/abstract=444960 or doi:10.2139/ssrn.444960
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