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Political connections and operational performance of non-financial firms: New evidence from Poland

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  • Jackowicz, Krzysztof
  • Kozłowski, Łukasz
  • Mielcarz, Paweł

Abstract

This study analyses the impact of political connections on the operational performance of non-financial firms in Poland. Using a data set covering the 2001–2011 period, we find that political connections lower firm profitability, as measured on the level of income from sales. The negative impact is the strongest when a firm possesses multiple connections, has politically connected members on its supervisory board, or employs ex-politicians with central government experience. Therefore, our findings do not support claims based on resource dependence theory. The Polish market's specificity is most likely related to the instability of the political scene.

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  • Jackowicz, Krzysztof & Kozłowski, Łukasz & Mielcarz, Paweł, 2014. "Political connections and operational performance of non-financial firms: New evidence from Poland," Emerging Markets Review, Elsevier, vol. 20(C), pages 109-135.
  • Handle: RePEc:eee:ememar:v:20:y:2014:i:c:p:109-135
    DOI: 10.1016/j.ememar.2014.06.005
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    Cited by:

    1. Wang, Delu & Ma, Gang & Song, Xuefeng & Liu, Yun, 2016. "Political connection and business transformation in family firms: Evidence from China," Journal of Family Business Strategy, Elsevier, vol. 7(2), pages 117-130.
    2. John Rand, 2017. "Are politically connected firms less constrained in credit markets?," WIDER Working Paper Series 200, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Political connections; Operational performance; Listed firms; Emerging economies;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • H80 - Public Economics - - Miscellaneous Issues - - - General

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