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Political Connection and Firm Value. Asian Development Review, Vol. 30(2), pp. 131–166

dc.contributor.authorJames S. Ang
dc.contributor.authorDavid K. Ding
dc.contributor.authorTiong Yang Thong
dc.description.abstractWe study the effect of political connection (PC) on company value in an environment where low PC is due to better institutions and not confounded by favorable social/cultural factors. We find that in Singapore, the only country that fits this description, PC in general adds little to the value of a company. However, in industries that are subject to more stringent government regulations, PC appears to be somewhat important. Robustness checks show that alternative PC variables give rise to similar results, and the addition of control variables do not drastically change the findings. Politically connected firms have higher managerial ownership and tend to be smaller than non-PC firms, rendering them more susceptible to poorer governance practices. We show that the presence of politically connected directors somewhat neutralizes such potential negative effects. PC firms are associated with good governance practices such as nonduality in their chairman and chief executive officer positions and fewer executive directors.
dc.publisherAsian Development Bank and Asian Development Bank Institute
dc.rightsCC BY 3.0 IGO
dc.titlePolitical Connection and Firm Value. Asian Development Review, Vol. 30(2), pp. 131–166
dc.subject.adbpolitical connection
dc.subject.adbcorporate governance
dc.subject.adbfirm value
dc.title.seriesAsian Development Review
dc.title.volumeVolume 30, Number 2, pp. 131–166
dc.contributor.imprintAsian Development Bank
oar.authorAng, James S.
oar.authorDing, David K.
oar.authorThong, Tiong Yang

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  • Asian Development Review
    The Asian Development Review (ADR) is a professional journal for disseminating the results of economic and development research relevant to Asia and the Pacific. Since 1983, the ADR has been an important part of the history of the Asian Development Bank and its mission to reduce poverty across Asia and the Pacific.

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