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Impact of the political experience on the firm's performance: Case of Tunisian companies after the 2011 revolution

Author

Listed:
  • Wided Bouaine

    (MOCFINE, University of Manouba)

  • Yosr Hrichi

    (MOCFINE, University of Carthage)

Abstract

The objective of this article is to analyze the impact of the political and strategic experience of directors acquired after the Tunisian revolution of 2011 on the performance of listed companies. in addition, it analyzes the effect of board diversity on the relationship between performance and political experience. The sample consists of 154 observations per company-year collected in an innovative Tunisian context characterized by high corruption. We use two regression models to test this impact using two measures of financial performance, namely ROE and Tobin's Q. We find that political experience has a negative impact on the performance measured by Tobin's Q. However, strategic experience, the presence of women and the frequency of meetings mitigate this negative impact and increase performance. The paper's findings have implications for administrators with political connections. We see the negative impact of political experience on the performance of companies in a context of high level of corruption like Tunisia. Furthermore, the strategic experience of directors improves company performance by compensating the managerial imperfections of entrepreneurs and improving financial transparency and company value.

Suggested Citation

  • Wided Bouaine & Yosr Hrichi, 2021. "Impact of the political experience on the firm's performance: Case of Tunisian companies after the 2011 revolution," Economics Bulletin, AccessEcon, vol. 41(4), pages 2612-2624.
    • Handle: RePEc:ebl:ecbull:eb-21-00172
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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I4-P226.pdf
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    More about this item

    Keywords

    Political experience; performance; Tunisian revolution; board of directors; corruption.;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • G3 - Financial Economics - - Corporate Finance and Governance

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