The relationship between political connections and firm performance: An empirical analysis in Europe

Maurizio La Rocca, Francesco Fasano, Francesco Cappa and Neha Neha

Finance Research Letters, 2022, vol. 49, issue C

Abstract: This paper analyzes the role of corporate political connections in firm performance from 31 European countries using LexisNexis®, a database that provides a highly standardized indicator of political links. Our results suggest that the political connections of managers and board members gradually gnaw away at firm performance, especially in the case of individuals with greater decision-making power, i.e. senior executives and CEOs. We respond to the need for objectivity and generalizability of results regarding this topic in management literature, especially since previous research has mainly focused on single country studies. In addition we also provide a number of practical implications.

Keywords: Political connections; Firm performance; Executives, CEOs; Board members (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003798

DOI: 10.1016/j.frl.2022.103157

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