Do different political connections affect financial reporting quality differently? Evidence from Malaysia

Khanh Hoang, Thanh Tran, Hien Thi Thu Tran and Anh Quoc Le

Managerial and Decision Economics, 2022, vol. 43, issue 2, 289-300

Abstract: This paper investigates the impacts of four distinct types of political connection on financial reporting quality (FRQ) using a unique sample of Malaysian listed firms during 2002–2016. Using a battery of regression techniques, we show that political connections associate with lower FRQ only in firms connected to the government through government‐linked investments and politically connected directors. However, the impact is absent in firms connected via personal relationships such as family members of the leading politicians and crony capitalists. We suggest that corporate FRQ varies across different categories of political connection and support the resource dependence theory.

Date: 2022
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https://doi.org/10.1002/mde.3395

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:43:y:2022:i:2:p:289-300

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