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The relationship between political connections and firm performance: An empirical analysis in Europe

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  • Rocca, Maurizio La
  • Fasano, Francesco
  • Cappa, Francesco
  • Neha, Neha

Abstract

This paper analyzes the role of corporate political connections in firm performance from 31 European countries using LexisNexis®, a database that provides a highly standardized indicator of political links. Our results suggest that the political connections of managers and board members gradually gnaw away at firm performance, especially in the case of individuals with greater decision-making power, i.e. senior executives and CEOs. We respond to the need for objectivity and generalizability of results regarding this topic in management literature, especially since previous research has mainly focused on single country studies. In addition we also provide a number of practical implications.

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  • Rocca, Maurizio La & Fasano, Francesco & Cappa, Francesco & Neha, Neha, 2022. "The relationship between political connections and firm performance: An empirical analysis in Europe," Finance Research Letters, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003798
    DOI: 10.1016/j.frl.2022.103157
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    2. Wei Yu & Huiqin Huang & Xinyan Kong & Keying Zhu, 2023. "Can Digital Inclusive Finance Improve the Financial Performance of SMEs?," Sustainability, MDPI, vol. 15(3), pages 1-16, January.

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