Political Connections and Business Strategy: The Impact of Types and Destinations of Political Ties on Business Diversification in Closed and Open Political Economic
AbstractThis paper studies how different types and destinations of connections between business leaders and political actors create strategic benefits in closed and open political economic systems. The analysis examines how political ties facilitate diversification by business groups in Taiwan between 1986 and 1998, before and after the country underwent extensive political and economic liberalization that led to changes in diffusion of power, tie accountability, and public scrutiny. We show that formal position interlocks with the dominant party or senior government officials provide the greatest strategic benefits in a closed political economic system, while informal social ties to a wider range of political actors provide greater strategic benefits when a political economic system becomes more open.
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Bibliographic InfoPaper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2008-24.
Length: 2, 47 p.
Date of creation: Mar 2009
Date of revision:
Note: November 2, 2007
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- Christian Leuz & Felix Oberholzer-Gee, .
"Political Relationships, Global Financing and Corporate Transparency,"
Center for Financial Institutions Working Papers
03-16, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Christian Leuz & Felix Oberholzer-Gee, 2003. "Political Relationships, Global Financing and Corporate Transparency," CREMA Working Paper Series 2003-03, Center for Research in Economics, Management and the Arts (CREMA).
- Mara Faccio, 2006. "Politically Connected Firms," American Economic Review, American Economic Association, vol. 96(1), pages 369-386, March.
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