Firms' political connections and performance in Brazil and Canada: an analysis of the effect of country institutional factors

被引:1
作者
Arantes, Vagner Alves [1 ]
Dicko, Saidatou [2 ]
Soares, Rodrigo Oliveira [3 ]
机构
[1] Fed Univ Parana UFPR, Accounting Dept, Postgrad Program Accounting PPGCONT UFPR, Ave Prefeito Lothario Meissner 632, BR-80210170 Curitiba, PR, Brazil
[2] Univ Quebec Montreal, Sch Management, Accounting Dept, Grp Rech Gouvernance & Relat Entreprise Polit, Montreal, PQ, Canada
[3] Fed Univ Parana UFPR, Adm Dept, Paostgrad Program Accounting PPGCONT UFPR, Ave Prefeito Lothario Meissner 632, BR-80210170 Curitiba, PR, Brazil
关键词
Political connections; Performance; Brazil; Canada; OWNERSHIP STRUCTURE; CORPORATE BOARDS; GOVERNANCE; AGENCY; SEPARATION; DIRECTORS; QUALITY; FINANCE; COST; LAW;
D O I
10.1007/s10997-022-09666-1
中图分类号
C93 [管理学];
学科分类号
12 ; 1201 ; 1202 ; 120202 ;
摘要
This study examines the link between the political connections and financial performance of companies in Brazil and Canada, taking into account the moderating role of their country institutional factors. The authors use a comparative analysis of the largest listed companies in the two countries between 2010 and 2017 inclusive. There were four main results: (a) no significant difference was noted in the number of politically connected firms, although Brazilian companies were more politically connected on average than Canadian companies; a significant difference was noted between Brazil and Canada in terms of the number of politically connected directors and executive officers; (b) a significant and positive link emerged in both countries between political connections and firm performance, as measured by ROIC and ROA; (c) distinguishing between the political connections of directors and those of officers, a more significant positive association with performance was noticed in the latter; (d) most important, a clear and significant moderating role played by their country institutional factors was not apparent in the relationship between firms' political connections and performance. These latter results are mainly due to the lack of significant difference between the two countries in the number of politically connected firms. Contrary to expectations (and those of previous studies examining multicountry samples), the same effects from corporate political connections were shown in both countries. The study makes two important contributions. First, political connections seem to have become stronger than governance and institutional mechanisms, when it comes to controlling the behaviour of big corporations. Political connections have become so important that they influence the firm's management structure, whatever the institutional context; they seem to transcend governance mechanisms. Second, this study is among the first to demonstrate the need for investigating political connections at different firm levels; it shows the specific effect of political connections through executive officers rather than only through boards of directors, as is usually done.
引用
收藏
页码:63 / 112
页数:50
相关论文
共 73 条
[1]   Exploring the relationship between corporate governance and firm's performance: Does political connection matter? [J].
Almarayeh, Taha ;
Tahtamouni, Asem ;
Al-Hamadeen, Radhi ;
Alaodat, Hamza ;
Alsoboa, Sliman .
JOURNAL OF CORPORATE ACCOUNTING AND FINANCE, 2023, 34 (02) :86-103
[2]   The value of local political connections in a low-corruption environment [J].
Amore, Mario Daniele ;
Bennedsen, Morten .
JOURNAL OF FINANCIAL ECONOMICS, 2013, 110 (02) :387-402
[3]  
Ang J.S., 2013, Asian Development Review, V30, P131
[4]  
[Anonymous], 2013, International Journal of Business and Management, DOI DOI 10.5539/IJBM.V8N18P63
[5]  
Boubakri N., 2012, Journal of Financial Research, V35, P397, DOI [10.1111/j.1475-6803.2012.01322.x, DOI 10.1111/J.1475-6803.2012.01322.X]
[6]  
Bourdieu P., 1986, Distinction: A social critique of the judgment of taste, P241
[7]  
Bourdieu P., 2000, Les structures sociales de l'economie Collection Liber
[8]   Law of incorporation and firm ownership structure: The law and finance theory revisited [J].
Bozec, Yves ;
Rousseau, Stephane ;
Laurin, Claude .
INTERNATIONAL REVIEW OF LAW AND ECONOMICS, 2008, 28 (02) :140-149
[9]   The relation between excess control and cost of capital [J].
Bozec, Yves ;
laurin, Claude ;
Meier, Iwan .
INTERNATIONAL JOURNAL OF MANAGERIAL FINANCE, 2014, 10 (01) :93-114
[10]   Overall governance, firm value and deviation from one share: one vote principle [J].
Bozec, Yves ;
Bozec, Richard ;
Dia, Mohamed .
INTERNATIONAL JOURNAL OF MANAGERIAL FINANCE, 2010, 6 (04) :305-+