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The Impact of Political Connections on the Performance and Solvency of Canadian Financial Institutions

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  • Saidatou Dicko

Abstract

This article¡¯s main goal is to analyze the impact of political connections on the financial performance of Canadian financial institutions. Data on Canadian financial institutions from the S&P/TSX Composite Index over a five-year period was analyzed, and the results demonstrate that contrary to previous studies on companies in other industries, political connections had a negative influence on solvency, return on assets and return on equity for these Canadian financial institutions. Only the market-to-book ratio was positively and significantly influenced by political connections.

Suggested Citation

  • Saidatou Dicko, 2016. "The Impact of Political Connections on the Performance and Solvency of Canadian Financial Institutions," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(11), pages 1-1, November.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:11:p:1
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    References listed on IDEAS

    as
    1. Gaetan Breton & Yvon Pesqueux, 2006. "Business in society or an integrated vision of governance," Post-Print hal-00509387, HAL.
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    3. Toufic Mezher & Dima Jamali & Carine Zreik, 2002. "The role of financial institutions in the sustainable development of Lebanon," Sustainable Development, John Wiley & Sons, Ltd., vol. 10(2), pages 69-78.
    4. James S. Ang & David K. Ding & Tiong Yang Thong, 2013. "Political Connection and Firm Value," Asian Development Review, MIT Press, vol. 30(2), pages 131-166, September.
    5. Fan Yang & Craig Wilson & Zhenyu Wu, 2014. "Investor perceptions of the benefits of political connections," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 10(3), pages 312-331, May.
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    Cited by:

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    2. Ganguly, Kousik & Mishra, Ajay Kumar & Parikh, Bhavik, 2023. "Do Political connections influence investment decisions? Evidence from India," Finance Research Letters, Elsevier, vol. 52(C).

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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