Political connections and firm operational efficiencies: evidence from a developing country

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• 作者：Abubakr Saeed ; Yacine Belghitar ; Ephraim Clark
• 关键词：Political connections ; Operational efficiencies ; Employments ; Investment
• 刊名：Review of Managerial Science
• 出版年：2017
• 出版时间：January 2017
• 年：2017
• 卷：11
• 期：1
• 页码：191-224
• 全文大小：
• 刊物主题：Business and Management, general; Accounting/Auditing; Banking; Marketing; Business Strategy/Leadership;
• 出版者：Springer Berlin Heidelberg
• ISSN：1863-6691
• 卷排序：11

文摘

This paper investigates the impact of political connections on firm operational efficiencies. We test the political interventions in investment and employment decisions. Our results provide strong support for the presence of investment inefficiencies and excessive employment amongst politically connected firms, whereas the detrimental effect of political interventions is substantially larger on employment decisions. We further find that such operational inefficiencies are more pronounced for low-growth connected firms. Finally, the economy-wide cost of the excessive employments is estimated to be 0.19 % of GDP annually.