American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Politically Connected Firms
American Economic Review
(pp. 369–386)
Abstract
Examination of firms in 47 countries shows a widespread overlap of controlling shareholders and top officers who are connected with national parliaments or governments, particularly in countries with higher levels of corruption, with barriers to foreign investment, and with more transparent systems. Connections are diminished when regulations set more limits on official behavior. Additionally, I show that the announcement of a new political connection results in a significant increase in value.Citation
Faccio, Mara. 2006. "Politically Connected Firms." American Economic Review 96 (1): 369–386. DOI: 10.1257/000282806776157704Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- L25 Firm Performance: Size, Diversification, and Scope
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements