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Political connectedness, corporate governance, and firm performance
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SYSNO ASEP 0464864 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Článek ve WOS Title Political connectedness, corporate governance, and firm performance Author(s) Domadenik, P. (SI)
Prašnikar, J. (SI)
Švejnar, Jan (NHU-N) RIDSource Title Journal of Business Ethics. - : Springer - ISSN 0167-4544
Roč. 139, č. 2 (2016), s. 411-428Number of pages 18 s. Language eng - English Country NL - Netherlands Keywords political connectedness ; political corruption ; corporate governance Subject RIV AH - Economics R&D Projects GA15-24642S GA ČR - Czech Science Foundation (CSF) Institutional support NHU-N - RVO:67985998 UT WOS 000387551100012 EID SCOPUS 84929095273 DOI 10.1007/s10551-015-2675-4 Annotation 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. Workplace Economics Institute Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2017
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