CEO’s Political Connection and Organization Efficiency: Evidence from Public Institutions in Korea

Hyejeong Shin () and Ji-Young Ahn ()
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Hyejeong Shin: Pusan National University
Ji-Young Ahn: Ewha Womans University

Public Organization Review, 2021, vol. 21, issue 3, No 4, 419-435

Abstract: Abstract This paper investigates whether political connection of Chief Executive Officer (CEO) in public institutions is associated with organization efficiency. We utilize two types of public institutions in Korea, state-owned enterprises (SOEs) and quasi-governmental organizations (QUANGOs). Using the Data Envelopment Analysis (DEA), we find that CEOs with political connection are positively related to organization efficiency. Specifically, such association is largely driven by QUANGOs whose revenue resource is fully funded and owned by the government. It implies that politically connected CEOs can improve firm efficiency when the organizations are financially dependent on the government and are under its stringent monitoring by government.

Keywords: Public institutions; State owned enterprises (SOEs); Political connections; Organizational efficiency; South Korea (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11115-020-00497-y

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