The Effect of Political Connections on the Firm Performance in a Newly Democratised Country

Bencheikh Fayrouz and Taktak Neila Boulila
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Taktak Neila Boulila: Higher Institute of Management of Gabès, Gabès, Tunisia

Mediterranean Journal of Social Sciences, 2017, vol. 8, issue 4, 40-46

Abstract: The study of the effect of political connections on the Tunisian firm performance after the 2011 uprising is the focal point of the paper. First, by applying a multiple linear regression model, the results show that political connections are positively associated with the market firm performance. Thereafter, a difference in difference model is applied to separate the connected and non-connected firms. Such a method is most likely to determine the factors driving the market performance of politically connected firms. Hence, results reveal that leverage, age and equity holdings increase the market performance of politically connected firms.

Keywords: Firm performance; political connections; Tunisia (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:mjsosc:v:8:y:2017:i:4:p:40-46:n:4

DOI: 10.1515/mjss-2017-0004

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