Differences between Politically Connected and Nonconnected Firms: A Cross‐Country Analysis

Mara Faccio ()

Financial Management, 2010, vol. 39, issue 3, 905-928

Abstract: Evidence from firms in 47 countries shows that companies with political connections have higher leverage and higher market shares, but they underperform compared to nonconnected companies on an accounting basis. Differences between connected and unconnected firms are more pronounced when political links are stronger. Differences also vary depending on the level of corruption and the degree of economic development in individual countries.

Date: 2010
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