Political connectedness, corporate governance, and firm performance

0464864 - NHÚ 2017 RIV NL eng J - Článek v odborném periodiku
Domadenik, P. - Prašnikar, J. - Švejnar, Jan
Political connectedness, corporate governance, and firm performance.
Journal of Business Ethics. Roč. 139, č. 2 (2016), s. 411-428. ISSN 0167-4544. E-ISSN 1573-0697
Grant CEP: GA ČR GA15-24642S
Institucionální podpora: RVO:67985998
Klíčová slova: political connectedness * political corruption * corporate governance
Kód oboru RIV: AH - Ekonomie
Impakt faktor: 2.354, rok: 2016

In this paper, we present and test a theory of how political connectedness (often linked to political corruption) affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. We test this prediction on an almost complete population of Slovenian joint-stock companies with 100 or more employees. Using the data on supervisory board structure, together with balance sheet and income statement data for 2000–2010, we show that a higher share of politically connected supervisory board members leads to lower productivity.
Trvalý link: http://hdl.handle.net/11104/0263620