Political and government connections on corporate boards in Australia: Good for business?

Stephen Gray, Iman Harymawan and John Nowland
Additional contact information
Stephen Gray: University of Queensland, Australia
Iman Harymawan: City University of Hong Kong, Hong Kong; Airlangga University, Indonesia
John Nowland: City University of Hong Kong, Hong Kong

Australian Journal of Management, 2016, vol. 41, issue 1, 3-26

Abstract: While prior studies document the benefits of political connections in emerging markets, their value in developed markets is less certain. In this study, we examine the types of firms that have directors with political and government connections on their boards and the value of these connections to shareholders in Australia, a developed market with low levels of corruption and lobbying, and public funding of election campaigns. We find that directors with political and government connections hold 2.1% of listed company directorships (in 7.7% of listed companies) in Australia. After controlling for director and firm characteristics, we find the market reaction to the appointment of directors with political and government connections is significantly lower than other directors. This is particularly the case for former politicians whose political parties are not in power and who have less political experience. In summary, we find no evidence that political and government connections on corporate boards are particularly abundant or valuable to shareholders in Australia.

Keywords: Board of directors; director appointments; director experience; government connections; political connections (search for similar items in EconPapers)
JEL-codes: D72 G14 G34 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0312896214535788 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:41:y:2016:i:1:p:3-26

DOI: 10.1177/0312896214535788

Access Statistics for this article

More articles in Australian Journal of Management from Australian School of Business
Bibliographic data for series maintained by SAGE Publications ().