Political connections, collateral favours and debt access: some Tunisian evidence

Fayrouz Bencheikh and Neila Boulila Taktak

International Journal of Management and Enterprise Development, 2019, vol. 18, issue 1/2, 107-118

Abstract: The purpose of the paper is to study the effect of political connections on collateralisation and debt access. The study is carried out on a sample of Tunisian firms on the period 2007-2012. In the first step, we have taken into consideration an aggregate measure of collateral which is fixed assets. Results show that only long-term debt can be covered by fixed assets owned by connected firms. Then, in a second step, we have been studying the collateral liquidity through three components: lands, buildings and machineries and equipment. The major finding is that politically connected firms were able to gain access to debt without sufficient liquid collaterals.

Keywords: debt; political connections; collateral liquidity. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijmede:v:18:y:2019:i:1/2:p:107-118

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