Impact of Political Connections on Operational Performance
Author | : Krzysztof Jackowicz |
Publisher | : |
Total Pages | : 49 |
Release | : 2013 |
ISBN-10 | : OCLC:1308982244 |
ISBN-13 | : |
Rating | : 4/5 (44 Downloads) |
Book excerpt: This study analyses the impact of political connections on the operational performance of non-financial firms in a context of a post-transition European economy. Using a new and detailed data set covering the 2001-2011 period, we found that politically connected firms are much more numerous in Poland than previously reported in the literature. We established that political connections usually lower profitability measured on the level of income from sales. However, the relationship between political connections and operational performance was affected by the characteristics of the former. Namely, the negative impact was the strongest when a firm possessed multiple connections, had politically connected members of the supervisory board and employed ex-politicians with central government experience. Therefore, our findings did not support claims based on the resource dependence theory that political connections improve the operational performance of firms.