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Does a firm's political connection to government have economic value?

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dc.contributor.authorChow-meng Chen
dc.contributor.authorAriff, Mohamed
dc.contributor.authorHassan, Taufiq
dc.contributor.authorShamsher Mohamad Ramadili Mohd
dc.date.accessioned2016-06-06
dc.date.accessioned2016-07-25T20:05:45Z
dc.date.available2016-06-06
dc.date.available2016-07-25T20:05:45Z
dc.date.disclosure2016-06-10
dc.date.issued2013
dc.description.abstractThis paper reports new findings about differential impacts political events have on share prices of firms connected to government in power compared to firms with no political connections. Political connection has been alleged as valuable in popular press in this mid-income economy studied, so it is worth an investigation. Significant share price increases of 4% or more abnormal returns accrue to connected firms relative to unconnected firms when identical political events occur. The impact is very pronounced during a severe economic crisis, when the stakes were high about an incumbent government being re-elected. Our finding of higher value of politically connected firms is due to the expected value of preferential treatments, preference in project selections and access to state benefits. Thus, share prices of politically connected firms react with greater impacts than non-politically connected firms to announcements of identical political events.
dc.identifier.citationChow-meng Chen and Ariff, Mohamed and Hassan, Taufiq and Ramadili Mohd, Shamsher Mohamad. (2013). Does a firm's political connection to government have economic value? Journal of the Asia Pacific Economy, 18 (3), pp. 477-501.
dc.identifier.doihttps://doi.org/10.1080/13547860.2012.742674
dc.identifier.urihttps://ikr.inceif.edu.my/handle/INCEIF/1405
dc.languageEnglish
dc.language.isoeng
dc.publisherRoutledge
dc.rights2013. Routledge
dc.sourceCRP
dc.subjectPolitical control
dc.subjectEvent study
dc.subjectPatronage
dc.subjectOwnership and control
dc.subjectRent seeking
dc.titleDoes a firm's political connection to government have economic value?
dc.typeJournal Article
dlc.maintopicConventional finance
dlc.subtopicEconomics
dspace.entity.typePublication
ikr.doctypeScholarly Works
ikr.docurlhttp://www.tandfonline.com/doi/abs/10.1080/13547860.2012.742674
ikr.topic.maintopicConventional finance
ikr.topic.subtopicConventional finance
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relation.isAuthorOfPublication.latestForDiscovery33b91dde-0170-454c-8f2b-ec4b208837b9
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