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The voluminous strategy research on the determinants of corporate scope is often premised on a well-established property rights regime, which contrasts with the weak property rights protection that still characterizes most countries today. We address this gap by applying property rights theory to theorize and empirically examine how the strengthening of the property rights regime affects corporate scope. Our analysis exploits the enactment of a property law that enhanced the formal protection of private properties in China as a quasi-experiment. We show that with a strengthened property rights regime, the horizontal relatedness among private firms' businesses increases, but their vertical relatedness decreases, compared with state-owned firms. Further, these effects are less prominent for politically connected firms that are afforded informal protection of property rights. Our findings shed new light on the property rights regime as a critical determinant of firms' horizontal and vertical scope. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the impacts of China's anti-corruption campaign on firms' operation and performance in the energy industry. Our theoretical model predicts that the campaign has resulted in those energy firms that had been strongly connected to government reducing their non-productive political activities, receiving fewer benefits from the government, and improving their efficiency. This is tested using a unique panel dataset of publicly listed energy firms in China for 2007-2017. Since the advent of the campaign, energy firms have less access to higher bank credits and preferential taxes through political connections, and the increasing political pressure has reduced firms' participation in philanthropy donations and bribery payments by 36% and 6.8%, respectively. Energy firms are also innovating more to compensate for their losses from the campaign, with a 23.8% increase in the number of invention-type patents found. Thus, the productivity of energy firms has been boosted by 3.9% on average since the campaign began. Our findings thus provide confirmative support that a firm responds strategically to the external political shocks through internal resource reallocation towards innovation in its operation and production. [ABSTRACT FROM AUTHOR]

This paper investigates the association between corporate social responsibility (CSR) and tax avoidance (TA), with a particular focus on how political connections influence this relationship. The study examines non-financial companies listed on the Egyptian Exchange (EGX) over the period from 2017 to 2022, encompassing a final sample of 70 firms and 420 firm-year observations. Pooled Ordinary Least Squares (OLS) and fixed-effects regression methods are utilized for statistical analysis. The findings reveal a significant positive correlation between CSR activities and a higher degree of TA, suggesting that companies involved in CSR are more likely to engage in TA. Moreover, political connections are shown to have a moderating effect, further strengthening this relationship. To the authors' knowledge, this research is one of the first attempts to explore the moderating influence of political connections on the CSR-TA relationship in an emerging market context. By doing so, it extends the debate in the literature regarding the negative role played by political connections in increasing TA in developing markets. Previous studies primarily focused on the direct link between CSR and TA, but this study sheds light on the nuanced interaction between these factors when political ties are considered. [ABSTRACT FROM AUTHOR]

Introduction: Government-business relations are a concentrated manifestation of the interaction process and outcomes between the government and enterprises, directly influencing the social capital and institutional environment upon which businesses rely. Sound government-business relations are crucial for addressing environmental issues and promoting high-quality development in China. Methods: This study extensively examines how New Government-business Relations (NGR) impact Corporate Environmental Performance (CEP) by analyzing A-share listed companies from 2017 to 2021 and applying the regulatory capture theory. Results: The empirical findings show that NGR can prevent environmental regulatory capture, thereby improving CEP. After conducting several robustness tests, such as substituting the dependent variable, using instrumental variables, and performing dynamic panel analysis, the results remain consistent. Additionally, the mechanism analysis reveals that NGR can effectively thwart environmental regulatory capture resulting from rent-seeking behavior and political connections, leading to enhanced CEP. Moreover, additional research indicates that the beneficial impact of the NGR on the environmental performance of non-high-pollution industry enterprises, mature enterprises, and businesses operating in regions with stringent environmental regulations is more significant. Discussion: Building on prior literature, this paper augments the body of relevant research on environmental regulatory capture within the Chinese context, offering fresh insights and empirical evidence to comprehend the evolving government-business relations in contemporary times and their significance in environmental conservation. [ABSTRACT FROM AUTHOR]

This study examines British Petroleum's (BP) strategic framing and deployment of politically connected governance (PCG) practices amidst geopolitical disruptions from 2010 to 2017. Through thematic analysis, the study identifies three PCG practices developed by BP during reputational disruption, regulatory challenges and political upheavals. Each practice, supported by clusters of political and (non‐)executive actors, shares joint expertise and is deployed defensively or proactively amidst geopolitical disruptions. BP's framing strategies, which include responsiveness, compliance and collaboration, aim to alter stakeholders' perceptions. These understandings affect governance code setters, policymakers and related academic literature. [ABSTRACT FROM AUTHOR]

In this paper, I assess the existence of a political connection premium for Italian municipalities during the so-called "Second Republic" (1991–2011). The early 1990s witnessed a seminal event in Italian political history with the "Mani Pulite" ("Clean Hands") investigation following the fall of the Berlin Wall. Subsequently, major political parties dissolved, culminating in a bipolar political landscape characterized by cyclical alternation between center-right and center-left factions (extending until at least 2011). Exploiting population data on small and medium-sized Italian municipalities between 1991 and 2011, I found that "politically connected" municipalities showed a population premium of about 2.5% compared to "non-politically connected" ones. The results are robust to NUTS-3 fixed effects, to a comprehensive set of controls, and to a full set of robustness checks. The relationship is confirmed using aggregate municipal income data as an additional proxy of local economic growth. Over and above this, social capital and the quality of local institutions seem to play a pivotal role in enabling the political connection. Election-related checks suggest the connection as two-way: using municipal data from the 2013 and 2018 general elections, I found that the treated municipalities depicted a higher turnout and fewer populist votes. [ABSTRACT FROM AUTHOR]

This study investigates the impact of CEO characteristics—specifically CEO age, founder status, and family membership—on investment efficiency in Jordanian non-financial companies, with a focus on the moderating role of political connections. Drawing on the existing literature, we identify conflicting views regarding how these characteristics influence investment decisions. Some studies suggest that younger CEOs may adopt more aggressive investment strategies, while older CEOs tend to be conservative, leading to balanced resource allocation. Similarly, CEOs with founder status and family membership are thought to have an emotional attachment to the company, theoretically resulting in cautious investment behavior. However, empirical evidence remains mixed. By using data from 62 non-financial firms listed on the Amman Stock Exchange (ASE) from 2019 to 2023, this study employs regression analysis to explore these relationships. The findings reveal that CEO age contributes to investment efficiency by mitigating both over- and under-investment. Contrary to expectations, CEO founder status shows no significant effect on investment efficiency. Additionally, family-member CEOs exhibit a tendency toward under-investment, driven by a desire to preserve family wealth. Political connections further complicate these dynamics, encouraging riskier investment strategies while diluting the positive effects of CEO characteristics. These results provide new insights into the intricate interplay between CEO traits and political networks, contributing to the discourse on corporate governance in emerging markets. The study concludes with practical implications for policymakers and company boards, emphasizing the need for balanced leadership selection strategies to optimize investment efficiency. [ABSTRACT FROM AUTHOR]

Purpose – This study aims to analyse the political connections of Portuguese companies through the members of the board of directors, exploring how these connections influence, in particular, the composition and characteristics of the boards. Design/methodology/approach – The research used a strategy based on analysing the financial statements and curriculum vitae of the directors of Portuguese companies listed on Euronext Lisbon from 2014 to 2019. The political connections of board members were examined, considering the variables identified in the existing literature. Findings – The results indicate that companies with political connections maintain these relationships for long periods and have a greater number of members on the board of directors compared to companies without such connections. Directors with political experience tend to occupy non-executive positions, suggesting that companies may value political contacts more than the management skills of these directors. It was also found that there are politically connected directors who belong to multiple boards and that women appointed to the board are less likely to have a political background, reflecting male dominance in Portuguese politics. Research limitations/implications – The main limitations of this study include the small number of listed companies in the sample, which may affect the statistical robustness of the results, as well as the use of secondary sources, which may not capture all relevant policy linkages. In addition, the results are specific to the Portuguese context and may not be generalisable to other countries or other regions of the world. Originality/value – This study contributes to the understanding of political connections in Portuguese companies, offering valuable insights into how these connections influence board composition and can impact corporate strategy and governance. The findings of this study can be especially useful for business leaders looking to optimise the formation of their boards of directors.

This study examines the impact of military cultural atmosphere on corporate innovation risk-taking within the unique institutional context of China. Leveraging an unbalanced panel dataset of 3506 Chinese A-share listed companies, comprising 15,381 observations from 2010 to 2022, this empirical analysis captures dynamic firm-level changes over time. Using ordinary least squares (OLS) regression to assess the effects of military cultural atmosphere and two-stage least squares (2SLS) to address potential endogeneity concerns, this study ensures robust results. The findings reveal that military cultural atmosphere, characterized by discipline, hierarchy, and collective responsibility, significantly enhances firms' propensity for innovation risk-taking. Additionally, political connections emerge as a key mediating factor in this relationship, while perceived power within the organization moderates the mediation effect, exhibiting a negative moderation. These results underscore the critical role of military backgrounds among senior executives in shaping corporate culture and strategic decision-making, particularly in China's policy-driven market environment. This study offers valuable insights for fostering long-term corporate resilience and strategic innovation, while also contributing to a deeper understanding of the interaction between corporate culture and innovation across different institutional settings. [ABSTRACT FROM AUTHOR]

This study investigates the impact of audit quality, internal audit organizational structure, political connections, and company size on litigation risk in the consumer goods industry sector listed on the Indonesia Stock Exchange during the period from 2017 to2022. A quantitative approach was used by applying Fixed Effects, Ordinary Least Squares, Random Effects, and Robust Regression analysis simultaneously to analyze panel data. The results showed that high audit quality serves as a significant positive signal in reducing the risk of lower litigation, providing confidence to stakeholders that financial statements can be more reliable and free from material misstatement. Meanwhile, a better internal audit organizational structure introduces complexity in the management of litigation risk as the organization grows, highlighting the possibility of more complicated implications in the context of signals, when internal audit placement does not fit the needs of the organization. Political connections and company size provide positive signals regarding litigation risk, albeit with different levels of significance, indicating complexity in the dynamics of political signals and company size. The findings of this study can guide stakeholders in the appointment of agents to manage the company. [ABSTRACT FROM AUTHOR]

Politically connected firms critically rely on their sociopolitical capital to compete; however, a policy-induced loss of board political connections may pose a serious challenge for focal firms and prompt them to develop compensatory moves. Drawing upon resource dependence theory and the nonmarket strategy literature, we examine if and how focal firms may address this challenge through intensifying their bribery activities. Following a year 2013 policy shock that closed the revolving door between former government officials and connected firms in China, we identify a substantial increase of bribery expenditure in a sample of public corporations whose political independent directors were forced by the central government to resign in the subsequent years. Furthermore, we investigate how the strength of this response varies with a host of firm-level contingencies that capture dependence scope and dependence asymmetry in the business-government dyad at the time of the policy announcement. Our study contributes to strategy and governance literatures by demonstrating how firms restructure power relationships after the loss of board political capital. It also sheds light on the regulation of revolving doors under weak institutions by revealing the irony of a well-intentioned "anticorruption" government policy. [ABSTRACT FROM AUTHOR]

Abstract This research aims to enlighten current and future research trends on political connections by providing complete bibliometric mapping through network studies on political connections. Utilizing Biblioshiny, the Bibliometrics R package, multi-perspective research publications on political connections from 2003 to the third quarter of 2023 were discovered and analyzed. This bibliometric analysis provides valuable insights regarding current and future publications on political connections. The most prolific contributors, the most used keywords, the most productive countries and sources, the most cited publications, and the most productive sources of information are network analysis data about co-occurrence networks. The discourse revolves around issue mapping data on political connection studies. The search method used to find related literature is the Scopus database. This research contributes valuable information to help other researchers map ongoing and future investigations into political connections. This bibliometric analysis of 294 documents is the first regarding political connections known to researchers. This evaluation emphasizes annual publication trends, authors, publications, countries, organizations, and most productive sources, determining potential future research objectives. The research on political connections was published in early 2003. No papers were released on this subject for 3 years after 2003 (2003–2005), which shows that the growth of this academic field slowed down for ten years. There were significant changes in 2011, and many more linked papers have been released. Authors from the USA and China significantly contributed to the initial scientific journal papers on their political connections. Hong Kong, China, and Australia are recognized as leading nations in scholarly contributions to studying political connections. Chinese scholars spearheaded the collaborative publication effort focused on political connections, with the USA and Australian experts following suit. Based on indexed terms, political connections, sustainable development, and financial performance are trending keywords. These results show possible directions for further research into political connections.

The main objective of this research is to examine the impact of political connections on the relationship between corporate governance and management accounting in companies listed on the Tehran Stock Exchange. The statistical population includes listed companies during the period from 2008 to 2023. This study is descriptive-correlational and utilizes both parametric and non-parametric statistical models. Various machine learning methods, including random forests, decision trees, SVM, and neural networks, were used for data analysis. Results indicate that variables such as the percentage of institutional shareholders (IO) and the percentage of government ownership (GO), as indicators of political connections and corporate governance, have a significant impact on the application of management accounting. Additionally, the interaction of these two variables (IO*GO) shows high importance in the model, demonstrating the influence of political connections on the relationship between corporate governance and management accounting. Moreover, profitability (PROF) and company size (SIZE) were identified as important factors affecting the implementation of management accounting. The neural network analysis results show that political connections play a significant role in shaping the relationship between corporate governance and the application of management accounting. The composite variable IO*GO (interaction between institutional shareholders and government ownership) has shown the most significant impact on this relationship. These findings indicate the profound influence of political connections on governance structures and management decisions in Iranian companies. This research emphasizes the complexities arising from the intersection of political and economic interests, suggesting the need for a review of macroeconomic policies and the establishment of more effective regulatory mechanisms. This study can assist policymakers and regulatory bodies in improving transparency, increasing efficiency, and enhancing Iran's position in international business indices. In other words, the present research emphasizes the importance of reforming existing structures and creating effective control mechanisms in the country's macroeconomic policies. It also highlights the necessity of creating a healthy and fair competitive environment in Iran's economy and strengthening anti-monopoly and conflict of interest laws. This study can help policymakers and regulatory bodies improve the business environment, increase transparency, and enhance Iran's position in international indices. [ABSTRACT FROM AUTHOR]

Prior research has argued that companies in transition economies engage in corporate social responsibility (CSR) activities to achieve political goals, such as building connections with the government. However, it is unclear why chief executive officers (CEOs) agree to make these politically driven CSR decisions that mainly benefit the controlling shareholders. We show that controlling shareholders may "bribe" the CEOs with greater compensation or perks—a form of economic rents extracted by the CEOs—to make CSR decisions, and such a pattern is more salient in local government-owned companies. We reason that these CSR activities reflect implicit contracting between the controlling shareholders and the CEOs. Through cross-section analyses, we find that the CEO's economic rents vary with local government fiscal needs, the firm's governance structure, and CEO power. Furthermore, we demonstrate that increases in CSR-linked compensation lead to a decline in shareholder value. Data Availability: All data are available from public databases identified in the paper. JEL Classifications: D72; M12; P26. [ABSTRACT FROM AUTHOR]

This study investigates the moderating role of corporate governance in the relationship between political connections and investment efficiency. Using a sample of Malaysian publicly listed firms from 20012017, we find that political connections are negatively correlated with firm investment efficiency. Moreover, the relationship is robust with the inclusion of corporate governance mechanisms, which moderated the potential consequences of agency problems in politically connected firms. The evidence suggests that corporate governance appears to be an effective mechanism to improve investment efficiency in politically connected firms. Consistent with the agency costs of free cash flow theory, we also discover that political connections have a more significant detrimental impact on overinvestment compared to their positive influence on underinvestment. Nevertheless, the interaction results in corporate governance hold regardless of overinvestment or underinvestment. Further analysis reveals that domestic institutional ownership, Big Four auditors, and audit committees are effective governance mechanisms, whereas similar observations do not hold for foreign institutional ownership, board size, board independence, and director ownership. Resultantly, high direct policy relevance is provided for governance practitioners and policymakers in monitoring the investment activities of PCFs. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between credit constraints encountered by small- and medium-sized enterprises (SMEs) and their propensity to engage in pollution prevention and control practices in developing and transition countries. Using data from the Enterprise Surveys conducted in 2018–2020 and applying a Poisson model, we find that credit rationing is negatively associated with SMEs' environmental performance. However, family ownership, human capital, and political networks seem to mitigate this negative relationship. Therefore, credit rationing appears particularly detrimental for the environmental footprint of those firms, which are less likely to pursue nonfinancial goals, and have a lower capability to seize green investment opportunities by successfully accessing and using alternative means of financing. Our study provides insights for policy makers to promote policy aimed at encouraging national and international financial institutions to provide SMEs funds for green practices. Moreover, governments should support training programs to improve SMEs employees' skills. [ABSTRACT FROM AUTHOR]

This paper examines whether state ownership and political connections affect the relationship between customer concentration and cash holdings for Chinese listed manufacturing firms. We show that non‐state‐owned firms, but not state‐owned firms, hold more cash as customer concentration increases. In addition, political connections weaken the positive effect of customer concentration on non‐state‐owned firms' cash holdings. Our supplemental analyses further show that for non‐state‐owned firms with limited access to finance—for instance, firms with low analyst following, low institutional ownership, or low government subsidies—the effects of political connections on weakening the positive association between customer concentration and cash holdings are more pronounced. Additional robustness tests support our arguments. [ABSTRACT FROM AUTHOR]

Understanding how firms cope with economic crises is of great importance, particularly in this period of rising interest rates coupled with a severe pandemic crisis. This study conducts an empirical analysis of firms in distress based on a large firm-level panel dataset containing detailed micro-level information on Chinese manufacturing firms. We study economic distress rather than financial distress. Moreover, we identify survival tactics adopted by distressed firms and the factors driving their choice of tactics. We show that three particular survival tactics help distressed firms recover, namely, reliance on fixed assets, reliance on intangible assets, and cost reduction. Furthermore, we show the critical role of institutional development in emerging economies, where institutions include product markets, financial markets, and legal institutions. [ABSTRACT FROM AUTHOR]

IntroductionGovernment-business relations are a concentrated manifestation of the interaction process and outcomes between the government and enterprises, directly influencing the social capital and institutional environment upon which businesses rely. Sound government-business relations are crucial for addressing environmental issues and promoting high-quality development in China.MethodsThis study extensively examines how New Government-business Relations (NGR) impact Corporate Environmental Performance (CEP) by analyzing A-share listed companies from 2017 to 2021 and applying the regulatory capture theory.ResultsThe empirical findings show that NGR can prevent environmental regulatory capture, thereby improving CEP. After conducting several robustness tests, such as substituting the dependent variable, using instrumental variables, and performing dynamic panel analysis, the results remain consistent. Additionally, the mechanism analysis reveals that NGR can effectively thwart environmental regulatory capture resulting from rent-seeking behavior and political connections, leading to enhanced CEP. Moreover, additional research indicates that the beneficial impact of the NGR on the environmental performance of non-high-pollution industry enterprises, mature enterprises, and businesses operating in regions with stringent environmental regulations is more significant.DiscussionBuilding on prior literature, this paper augments the body of relevant research on environmental regulatory capture within the Chinese context, offering fresh insights and empirical evidence to comprehend the evolving government-business relations in contemporary times and their significance in environmental conservation.

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Corporate governance and company value are essential issues in managing state-owned companies in Indonesia. This research examines the influence of corporate governance index and related-party transactions on the value of state-owned companies on the Indonesia Stock Exchange by analyzing the role of political connections as a moderating variable. The population of this research is all state-owned companies on the Indonesia Stock Exchange from 2015 to 2022. The research sample was obtained using a purposive sampling technique. Data analysis uses moderated regression analysis. This research found that, in the case of state-owned companies in Indonesia, the corporate governance index positively affected company value. In contrast, related-party transactions harmed company value. Political connections have not been proven to be a moderating variable in the influence of corporate governance index on company value. However, they are proven on the influence between related-party transactions and company value. Investors in the Indonesian capital market assess political connections in state-owned companies in Indonesia as increasing the risk that it will worsen the influence of related-party transactions and the value of state-owned companies.

Prior research suggests that (1) politically active firms have an information advantage over firms that do not engage in the political process but also that (2) politically active firms are more likely to disclose policy-related information. We examine whether there are externalities associated with the processing of political information by politically active firms. We study this question in the setting of intraindustry information transfers around earnings announcements. Measuring firms' political activism using campaign contributions, we find stronger intraindustry information transfers from politically active firms to their industry peers. These information transfers are stronger when there is more discussion during conference calls of political topics that have industry- or market-wide implications. Similarly, these information transfers are also stronger when there is greater political uncertainty. Our paper highlights an important information externality related to politically active firms' disclosures and improves our understanding of how politically active firms affect their industries' information environment. Data Availability: The data used in this study are publicly available from the sources cited in the text. JEL Classifications: D72; M41; M48. [ABSTRACT FROM AUTHOR]

The graduate approach applied in China for the economic transition poses the risk of continued government influence on the market. The land reform and the following adjustment in China have introduced a seemingly complete market for residential land. However, a widely practiced coalition between the local developmental states and developers might impact residential land leasing in a more hidden way. Taking central Chengdu as the study area, this study takes the enterprise ownership and affiliations as two explanatory factors that impact the land leasing prices and builds an MGWR model to evaluate the premium of political connections for the developers to obtain the land. The result gives a clue to the local protectionism and preference for state-owned enterprises that might exist in land leasing in Chengdu. It is proved in this study that the average purchase price by state-owned enterprises is 8.9% lower than the prices that private enterprises could enjoy, and the average land leasing price by local enterprises is 14.2% lower than that enjoyed by non-local enterprises. The preceding conceptual and empirical discussion in this study advocates for a review and rethinking of the public sector's intervention in China's land market. In-depth analyses of the factors that define the land leasing behaviors of the local government are needed. [ABSTRACT FROM AUTHOR]

This article empirically examines how political connections (PCs) affect a firm's media reaction after corporate fraud. Using data for Chinese listed companies from 2008 to 2021, we find that the media reports more positively for firms with PCs than for others that do not possess such advantages after the enforcement against fraud. The results are robust to a series of robustness checks and endogeneity corrections. When decomposing media reports, we find that PCs only facilitate positive media coverage but do not impede negative media coverage, which is more pronounced in state‐controlled media. This suggests that PCs protect firms' branding by facilitating positive media reports rather than withholding bad news. Moreover, we find this protective effect is more pronounced in firms with stronger PCs, weaker anti‐corruption regulation, lighter punishment for fraud, private ownership, and more donations. Further, the consequences analysis shows that this kind of protective effect significantly increases the probability of future fraud and stock price crashes. Our findings present a new perspective on the role of PCs and provide evidence for political bias in media coverage. [ABSTRACT FROM AUTHOR]

Numerous organizational researchers have acknowledged that COVID-19 reduced the profit in the tourism industry. Some tourism firms decreased the cost by reducing the investment of CSR in order to increase the profit. However, the relevant literature remains scarce. The main purpose of this study is to explore the effect of COVID-19 on CSR investment in the tourism industry. This study fills the gap between stakeholder and cost stickiness theories. Based on a quasi-experiment of listed Chinese tourism companies from 2017 to 2021, the study finds that COVID-19 caused tourism firms to increase strategic CSR and decrease a responsive one. In addition, tourism firms that adopted cost leadership strategies trimmed responsive CSR more than strategic CSR. Tourism firms with differentiation leadership strategies increased strategic and decreased responsive CSR. Tourism firms with higher levels of political connections increased responsive CSR, while tourism firms with higher organizational resilience increased strategic CSR. At the theoretical level, this study reveals the theoretical mechanism of COVID-19 on tourism firms' adjustment of CSR from the perspective of cost stickiness. On a practical level, it helps inform tourism firms' decision-making regarding CSR adjustments for sustainable development when they face widespread crisis scenarios. [ABSTRACT FROM AUTHOR]

This research aims to determine the influence of political connections and efficiency on financial performance and their implications for stock value. The research design employed in this study is quantitative research. The population of this study consists of 66 companies in the mining sector listed on the IDX Sector Energy. The sampling technique used in this research is purposive sampling. The data used are secondary data obtained from www.idx.co.id. Hypothesis testing is conducted using Partial Least Square analysis. The results of this study indicate that 1) Political connections have a non-significant positive influence on financial performance; 2) Efficiency has a significant favorable influence on financial performance; 3) Financial performance has a significant favorable influence on company value; 4) Financial performance has a non-significant positive mediating effect on the relationship between political connections and company value; 5) Financial performance has a significant positive mediating effect on the relationship between efficiency and company value.

The current paper investigates the role of political connections in firm performance under various conditions of market competition and institutions in Vietnam. By employing a three-year panel-data survey from 500 small and medium-sized enterprises and a fixed-effects model controlled for unobserved invariants, estimation results show that political connections with servants positively affect the performance of their firms when firm and industry effects and endogeneity of political connections are controlled. We also find that the positive impacts of political connections on firm performance vary with market competition, as in the case of Vietnam. We further find that political connections are significantly negative to firm performance in the conditions of weak market institutions in the case of Vietnam (the first stage of the institutional political connection hypothesis). In addition, there are no different institutional effects on firm performance between stages of the institution. Policies related to institutional development and corporate governance are recommended to foster firm performance and positive side-effects of political connections. [ABSTRACT FROM AUTHOR]

The purpose of this study is to investigate the relationship between Earnings persistence, institutional investors monitoring, and types of political connections in companies listed on the Tehran Stock Exchange. The statistical population of this study is all companies listed on the Tehran Stock Exchange from 2015 to 2021 and the number of samples is 105 companies. The regression analysis method and Ivory statistical software were used to analyze the research data. The results showed that institutional oversight in companies with political connections has an effective role in increasing profit stability. The selection of large auditors by companies with political connections has no significant relationship with profit stability. However, the longer the term of the CEO of companies with political connections increases, the more stable the profit. The results generally indicate a significant relationship between profit stability, institutional oversight, and various types of political communication. [ABSTRACT FROM AUTHOR]

We examine whether the Environmental Protection Agency (EPA) uniformly enforces the Clean Air Act for politically connected and unconnected firms using a close election setting. We find no difference in regulated pollutant emissions or EPA investigations between the two groups, although connected firms experience less regulatory enforcement and lower penalties. These results are more pronounced for firms connected to politicians capable of influencing regulatory bureaucrats and for connected firms that are more important to their supported politicians. Taken together, our results show that campaign contributions can indirectly benefit firms by way of reduced environmental regulatory enforcement and penalties. This paper was accepted by Colin Mayer for the Special Issue of Management Science: Business and Climate Change. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2020.3931. [ABSTRACT FROM AUTHOR]

This research aims to determine the influence of political connections and efficiency on financial performance and their implications for stock value. The research design employed in this study is quantitative research. The population of this study consists of 66 companies in the mining sector listed on the IDX Sector Energy. The sampling technique used in this research is purposive sampling. The data used are secondary data obtained from www.idx.co.id. Hypothesis testing is conducted using Partial Least Square analysis. The results of this study indicate that 1) Political connections have a non-significant positive influence on financial performance; 2) Efficiency has a significant favorable influence on financial performance; 3) Financial performance has a significant favorable influence on company value; 4) Financial performance has a non-significant positive mediating effect on the relationship between political connections and company value; 5) Financial performance has a significant positive mediating effect on the relationship between efficiency and company value. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The purpose of this paper is to investigate the effects of political connections on the association between firms' business strategy and their tax aggressiveness in an emerging economy such as China. The authors study a large sample of Chinese public firms from 2011 to 2017 using a panel regression model. In addition, a change analysis, an instrument variable test and alternative measures/samples are implemented as robustness tests. Firms adopting innovative business strategy are more tax aggressive overall. However, innovative firms with political connections are less tax aggressive compared to those without political connections. This paper contributes to the understanding of firms' tax behaviors in an emerging economy setting. It suggests that there are costs associated with political connections, such as foregone tax saving opportunities, which are understudies in the prior literature.

Research aims: This research aims to prove the effect of independent commissioner performance and audit committee expertise on earnings management to avoid earnings decreases and political connections to strengthen independent commissioner performance and audit committee expertise to limit earnings management. Design/Methodology/Approach: The population was manufacturing firms listed on Indonesian Stock Exchange during 2017-2020. The sampling technique used purposive sampling with a sample of 102 firms for four years or 408 observations. Then, hypothesis testing employed multiple regression analysis and hierarchical regression analysis. Research findings: The results showcased that accrual earnings management and abnormal discretionary expenses were used by managers to avoid decreases in earnings. On the other hand, corporate governance, like audit committee expertise, could be used to limit earnings management. While the political connection could strengthen and weaken the effect of independent commissioner performances in limiting earning management, political connections could not strengthen audit committee expertise in limiting real and accrual earnings management. Theoretical contribution/Originality: This research contributes to the political connection and earning management literature and provides empirical evidence of agency theory, positive accounting theory, prospect theory, and resource dependence theory. Practitioner/Policy implication: This research contributes to investors in determining investment decisions. Research limitation/Implication: The limitation of this research is that independent variables only used two components of corporate governance, i.e., the independent commissioner performances and audit committee expertise, so the level of influence of the independent variables on the dependent was small.

Purpose: This research aims to empirically prove the influence of political connections, institutional ownership and independent commissioners on earnings management in non-cyclical consumer sector manufacturing companies listed on the IDX in 2018 - 2022. Methodology/approach: this research uses quantitative methods whose data is obtained from the official website of the Indonesia Stock Exchange (BEI). The method used in sampling was purposive sampling, so that the sample obtained in this research was 17 companies with 85 observation data. The data analysis method used is multiple regression analysis with the help of SPSS version 25 data processing application software. Findings: The results of this study found that the presence of independent commissioners in the company will create tighter and more objective supervision of the financial reporting process so that it will prevent earnings management actions carried out by politically connected managers and with high institutional ownership within the company the institutions will be able to control company and will avoid earnings management practices. Practical and theoretical contributions/Originality: this research provides benefits for related parties such as investors. The results of this research provide new knowledge and insight for investors when they want to invest in a company. With this research, investors are able to assess and analyze a company whether the company is worthy of investment or not. Research limitations: this research has limitations, namely the difficulty in accessing data on each company's website because there are several companies whose data is incomplete. Apart from that, the sample used was too small due to certain criteria so that the sample was limited and the researcher only focused on one sector.

High-quality information disclosure improves the accuracy of investors’ judgment and efficiency in resource allocation. With a focus on the readability of information disclosed, this study analyzes how political connections affect the readability of financial statements by taking A-share private-owned companies listed on Shanghai and Shenzhen Stock Exchanges as research sample from 2008 to 2019. We use ordinary least squares model and moderating effect model as our main methodology. A series of robustness tests are also carried out. Our research finds that companies with political connections are more likely to issue less readable financial statements. This negative impact is diminished for the firms with a higher marketization level, better corporate governance, and greater analyst coverage. Further research on the economic consequences demonstrates that political connections would weaken the positive effect of the readability of financial statements on the firm’s future market value. This study enriches the research on the factors influencing the readability of financial statements and reveals the economic consequences of political connections in terms of textual information disclosure quality. It is therefore an important reference for regulatory authorities to formulate guidelines on text information disclosure and supervise the compliance of politically affiliated enterprises, while facilitating listed companies to enhance the readability of their financial statements.

AbstractThe study aims to examine the impact of different types of political connections in Pakistan on the performance of firms. We further examine whether the presence of external monitors, such as foreign and institutional investors, can moderate the impact of political connections on the performance of firms in Pakistan. In addition, we explore the association between political connections and firm performance during election and non-election years. This study uses 2479 firm-year observations for firms listed on the Stock Exchange of Pakistan from 2010 to 2019 as the final sample and uses regression to test the hypotheses. The findings of this study show that political connections are negative and strongly significant across all three performance indicators, such as ROA, ROE, and Tobin’s Q, indicating that political connections can harm firm value. Further analyses indicate that the detrimental impact of political connections on firm performance is attributable to CEOs who have political connections and is more pronounced during general election years in Pakistan. The findings further report some weak evidence of the monitoring roles played by foreign and institutional in mitigating the negative impact of political connections. Policymakers in Pakistan, therefore, ought to design stricter disclosure measures to limit the potential wealth expropriation in politically connected firms, given the lack of shareholder activism by outside shareholders in this country. Our results further suggest that external monitors, such as foreign and institutional ownership, play a relatively limited role in mitigating the adverse impact of political connections on the performance of firms.

Drawing on resource dependency theory and the resource-absorbing perspective of risk-taking, this article examines how political connections provide firms with opportunities to gain government funding support to enhance financial slack, which can in turn benefit their entrepreneurial risk-taking. We employ both symmetrical (partial least squares structural equation modelling (PLS-SEM)) and configurational approaches (fuzzy-set qualitative comparative analysis (fsQCA)) using a sample of 202 small and medium-sized enterprises (SMEs) in China. Our results from PLS-SEM suggest government financial funding support and financial slack play sequential mediating roles in the relationship between political connections and entrepreneurial risk-taking. The results of fsQCA further highlight the importance of political connections and financial slack as core conditions for entrepreneurial risk-taking and uncover the multiple pathways through which political connections influence entrepreneurial risk-taking. These findings advance our understanding of how entrepreneurial risk-taking in SMEs may require configurations of different resources. [ABSTRACT FROM AUTHOR]

Corporate political geography influences the value of real options because proximity to political power can trigger greater exposure to uncertainty and/or more growth opportunities. Our empirical tests reveal that although areas closely aligned with the president experience a boost in real options' value relevance, this effect is significant only among the majority of firms that are neither politically connected nor reliant on government contracts. Our findings are consistent with the notion that political connections essentially eliminate policy uncertainty (render real options value‐irrelevant), whereas government dependence additionally inhibits investment in growth opportunities (ability to exploit volatility) from proximity to political power. [ABSTRACT FROM AUTHOR]

Corruption influences firm behavior and performance even in relatively transparent countries like the United States. In this paper, we examine whether corruption at the state level affected bank failures during the subprime mortgage crisis. Our measure of corruption is the number of corruption convictions of government employees (adjusted for population) based on the Public Integrity Section (PIN) reports from the Department of Justice, capturing the degree of "public corruption" in the US. After disaggregating the data based on bank size and geography, we find that corruption is associated with more bank failures for smaller banks and fewer bank failures for banks located in the South. This research marks a pioneering attempt to examine the connection between corruption and bank failures while underscoring the significance of political risk for financial institutions. Given the recent setbacks experienced by Silicon Valley Bank, Signature Bank, and First Republic Bank, this research provides valuable recommendations for policymakers. The findings suggest the need for regulators to mandate greater transparency regarding banks' exposure to undisclosed risks, such as political risk. It also advocates for implementing internal control mechanisms to curb corrupt activities. [ABSTRACT FROM AUTHOR]