Politically Connected Firms

24 Pages Posted: 15 Oct 2003

See all articles by Mara Faccio

Mara Faccio

Mitchell E. Daniels, Jr. School of Business, Purdue University; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Date Written: 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 Classification: G3, F30

Suggested Citation

Faccio, Mara, Politically Connected Firms (July 13, 2004). Available at SSRN: https://ssrn.com/abstract=444960 or http://dx.doi.org/10.2139/ssrn.444960

Mara Faccio (Contact Author)

Mitchell E. Daniels, Jr. School of Business, Purdue University ( email )

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United States

National Bureau of Economic Research (NBER) ( email )

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European Corporate Governance Institute (ECGI)

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Belgium

HOME PAGE: http://www.ecgi.org

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