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Financial Crisis, Politically Connected CEOs, and the Performance of State-Owned Enterprises: Evidence from Korea

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  • Seungwon Yu
  • Namryoung Lee

Abstract

This study examines under specific situations the performance of state-owned enterprises (SOEs) from two points of view—business performance and public performance. We find that SOEs with a politically connected CEO perform well even during a financial crisis as the SOEs are able to obtain more favorable treatment. However, the results imply that politically connected CEOs perform poorly when government subsidies are excluded as they may lack the skills for successful management. The results also confirm that SOEs encourage more corporate social responsibility (CSR) activities during a financial crisis in an effort to gain legitimacy by demonstrating that they are committed to social responsibility. However, politically connected CEOs have a negative effect on CSR performance during a financial crisis.

Suggested Citation

  • Seungwon Yu & Namryoung Lee, 2016. "Financial Crisis, Politically Connected CEOs, and the Performance of State-Owned Enterprises: Evidence from Korea," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(9), pages 2087-2099, September.
    • Handle: RePEc:mes:emfitr:v:52:y:2016:i:9:p:2087-2099
    DOI: 10.1080/1540496X.2016.1186445
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    Cited by:

    1. Brahma, Sanjukta & Zhang, Jing & Boateng, Agyenim & Nwafor, Chioma, 2023. "Political connection and M&A performance: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 372-389.
    2. Liu, Weihua & Wang, Siyu & Lin, Yong & Xie, Dong & Zhang, Jiahui, 2020. "Effect of intelligent logistics policy on shareholder value: Evidence from Chinese logistics companies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 137(C).
    3. Jian, Jianhui & Li, Huaqian & Meng, Leah & Zhao, Chunxiang, 2020. "Do policy burdens induce excessive managerial perks? Evidence from China’s stated-owned enterprises," Economic Modelling, Elsevier, vol. 90(C), pages 54-65.
    4. Seles, Bruno Michel Roman Pais & Lopes de Sousa Jabbour, Ana Beatriz & Jabbour, Charbel Jose Chiappetta & Latan, Hengky & Roubaud, David, 2019. "Do Environmental Practices Improve Business Performance Even in an Economic Crisis? Extending the Win-Win Perspective," Ecological Economics, Elsevier, vol. 163(C), pages 189-204.

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