IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v36y2015i6p364-383.html
   My bibliography  Save this article

Political Connections and Leverage: Firm‐level Evidence from Pakistan

Author

Listed:
  • Abubakr Saeed
  • Yacine Belghitar
  • Ephraim Clark

Abstract

This study investigates the impact of political connections on corporate financing decisions using a sample of listed Pakistani firms over the period 2002–2010. We find a positive and significant link between long‐term debt and political connections, which reflects greater access to credit. Such preferential treatment escalates with the strength of the connected politician. Furthermore, positive effects of political connections are seen to be stronger for large firms and those affiliated with business groups. Copyright © 2014 John Wiley & Sons, Ltd.

Suggested Citation

  • Abubakr Saeed & Yacine Belghitar & Ephraim Clark, 2015. "Political Connections and Leverage: Firm‐level Evidence from Pakistan," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 36(6), pages 364-383, September.
    • Handle: RePEc:wly:mgtdec:v:36:y:2015:i:6:p:364-383
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ishtiaq Ahmad, 2017. "Do Group Affiliated And Unaffiliated Firms Hold Cash Differently? The Case Of Pakistan," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 373-384, July.
    2. Farah Zamir & Abubakr Saeed, 2020. "Location matters: Impact of geographical proximity to financial centers on corporate social responsibility (CSR) disclosure in emerging economies," Asia Pacific Journal of Management, Springer, vol. 37(1), pages 263-295, March.
    3. Ayesha Shoukat, 2020. "Political Connection and Enterprise Development (A Case Study of Nishat Business Group)," Journal of Contemporary Research in Social Sciences, Michael Laurence, vol. 2(1), pages 8-25.
    4. Yacine Belghitar & Andrea Moro & Nemanja Radić, 2022. "When the rainy day is the worst hurricane ever: the effects of governmental policies on SMEs during COVID-19," Small Business Economics, Springer, vol. 58(2), pages 943-961, February.
    5. Muhammad Sadiq & Zaleha Othman & Ooi Chee Keong, 2019. "A Study of Interaction Effects of Political Influences and Earnings Management on Organisational Performance," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(5), pages 642-654, May.
    6. Ishtiaq Ahmad & Judit Oláh & József Popp & Domicián Máté, 2018. "Does Business Group Affiliation Matter for Superior Performance? Evidence from Pakistan," Sustainability, MDPI, vol. 10(9), pages 1-19, August.
    7. Yu, Xiaojun & Yao, Yao & Zheng, Huanhuan & Zhang, Lin, 2020. "The role of political connection on overinvestment of Chinese energy firms," Energy Economics, Elsevier, vol. 85(C).
    8. Khanh Hoang & Thanh Tat Tran & Hien Thi Thu Tran & Anh Quoc Le, 2022. "Do different political connections affect financial reporting quality differently? Evidence from Malaysia," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 289-300, March.
    9. Saeed Ghasseminejad & Mohammad R. Jahan-Parvar, 2020. "The Impact of Financial Sanctions: The Case of Iran 2011-2016," International Finance Discussion Papers 1281, Board of Governors of the Federal Reserve System (U.S.).
    10. Braham, Rihem & de Peretti, Christian & Belkacem, Lotfi, 2023. "Political patronage and banks’ leverage in the Middle Eastern and North African region: A new neural panel regression analysis," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 298-306.
    11. Salman Mahmood & Wen shuhui & Shoaib Aslam & Tanveer Ahmed, 2022. "The Financial Inclusion Development and Its Impacts on Disposable Income," SAGE Open, , vol. 12(2), pages 21582440221, April.
    12. Liu, Liyun & Zhao, Zhenzhi & Zhang, Mingming & Zhou, Dequn, 2022. "Green investment efficiency in the Chinese energy sector: Overinvestment or underinvestment?," Energy Policy, Elsevier, vol. 160(C).
    13. Saeed, Abubakr & Sameer, Muhammad, 2017. "Impact of board gender diversity on dividend payments: Evidence from some emerging economies," International Business Review, Elsevier, vol. 26(6), pages 1100-1113.
    14. Yacine Belghitar & Ephraim Clark & Abubakr Saeed, 2019. "Political connections and corporate financial decision making," Review of Quantitative Finance and Accounting, Springer, vol. 53(4), pages 1099-1133, November.
    15. Nan Zhang & Qiaozhuan Liang & Huiying Li & Xiao Wang, 2022. "The organizational relationship–based political connection and debt financing: Evidence from Chinese private firms," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 69-105, January.
    16. Abubakr Saeed & Yacine Belghitar & Ephraim Clark, 2014. "Theoretical motives of corporate cash holdings and political connections: firms level evidence from a developing economy," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(6), pages 813-831, September.
    17. Ghasseminejad, Saeed & Jahan-Parvar, Mohammad R., 2021. "The impact of financial sanctions: The case of Iran," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 601-621.
    18. Saeed, Abubakr & Belghitar, Yacine & Yousaf, Amna, 2016. "Firm-level determinants of gender diversity in the boardrooms: Evidence from some emerging markets," International Business Review, Elsevier, vol. 25(5), pages 1076-1088.
    19. Demid Chernenko, 2019. "Capital structure and oligarch ownership," Economic Change and Restructuring, Springer, vol. 52(4), pages 383-411, November.
    20. Tahiru Azaaviele Liedong & Daniel Aghanya & Tazeeb Rajwani, 2020. "Corporate Political Strategies in Weak Institutional Environments: A Break from Conventions," Journal of Business Ethics, Springer, vol. 161(4), pages 855-876, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:36:y:2015:i:6:p:364-383. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.