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Cost of debt financing: Does political connection matter?

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  • Khaw, Karren Lee-Hwei
  • Zainudin, Rozaimah
  • Rashid, Rasidah Mohd

Abstract

•Impacts of political connections on cost of debt differ depending on the incentives in establishing political ties.•Executive and non-executive functions of a chairperson can be a distinctive measure to classify the underlying incentives.•PCON executive chairpersons benefit the firms, but PCON non-executive chairpersons are costly to firms.•Better corporate governance can mitigate unethical political influences and rent-seeking activities.

Suggested Citation

  • Khaw, Karren Lee-Hwei & Zainudin, Rozaimah & Rashid, Rasidah Mohd, 2019. "Cost of debt financing: Does political connection matter?," Emerging Markets Review, Elsevier, vol. 41(C).
    • Handle: RePEc:eee:ememar:v:41:y:2019:i:c:s1566014119301347
    DOI: 10.1016/j.ememar.2019.100632
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    2. Jingjing Huang, 2023. "Doing good in periods of political turnover: the turnover of local officials, local corruption and corporate social responsibility," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(4), pages 781-833, December.
    3. Faraji, Omid & Kashanipour, Mohammad & MohammadRezaei, Fakhroddin & Ahmed, Kamran & Vatanparast, Nader, 2020. "Political connections, political cycles and stock returns: Evidence from Iran," Emerging Markets Review, Elsevier, vol. 45(C).
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