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Are political connections beneficial or harmful toward firms’ performance? A meta-analysis approach

Are political connections beneficial or harmful toward firms’ performance? A meta-analysis approach This study aims to reconcile conflicting empirical results from prior studies on the association between political connections (PCs) and firms’ performance. Furthermore, it investigates whether the contradictory findings were moderated by the different types of both PCs and firms’ performance measures. This study also makes a cross-country comparison of the empirical evidence to provide more insight.Design/methodology/approachThis study used meta-analysis to integrate the previous studies’ findings on the association between PCs and firms’ performance and further investigated the moderators of such association.FindingsThe findings show that PCs have a positive association with firms’ performance. This result is apparent for both democratic and authoritarian countries, which suggests PCs’ beneficial consequences toward firms’ performance should not be disregarded in both contexts. This study also finds PCs and firms’ performance measures moderate the association between PCs and firms’ performance.Originality/valueThis study contributes to the stream of research that investigates the association between PCs and firms’ performance. To the best of our knowledge, it is among the first to implement statistical meta-analysis on the aforementioned literature while incorporating a cross-country comparison. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Corporate Governance Emerald Publishing

Are political connections beneficial or harmful toward firms’ performance? A meta-analysis approach

Prasetyo, Khusnul; Nasution, Damai
Corporate Governance , Volume 22 (5): 21 – Jun 14, 2022
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References (102)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1472-0701
eISSN
1472-0701
DOI
10.1108/cg-07-2021-0256
Publisher site
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Abstract

This study aims to reconcile conflicting empirical results from prior studies on the association between political connections (PCs) and firms’ performance. Furthermore, it investigates whether the contradictory findings were moderated by the different types of both PCs and firms’ performance measures. This study also makes a cross-country comparison of the empirical evidence to provide more insight.Design/methodology/approachThis study used meta-analysis to integrate the previous studies’ findings on the association between PCs and firms’ performance and further investigated the moderators of such association.FindingsThe findings show that PCs have a positive association with firms’ performance. This result is apparent for both democratic and authoritarian countries, which suggests PCs’ beneficial consequences toward firms’ performance should not be disregarded in both contexts. This study also finds PCs and firms’ performance measures moderate the association between PCs and firms’ performance.Originality/valueThis study contributes to the stream of research that investigates the association between PCs and firms’ performance. To the best of our knowledge, it is among the first to implement statistical meta-analysis on the aforementioned literature while incorporating a cross-country comparison.

Journal

Corporate Governance – Emerald Publishing

Published: Jun 14, 2022

Keywords: Meta-analysis; Political connections; Firms’ performance

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