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The Effect of Political Connections on the Firm Performance in a Newly Democratised Country

Author

Listed:
  • Bencheikh Fayrouz
  • Taktak Neila Boulila

    (Higher Institute of Management of Gabès, Gabès, Tunisia)

Abstract

The study of the effect of political connections on the Tunisian firm performance after the 2011 uprising is the focal point of the paper. First, by applying a multiple linear regression model, the results show that political connections are positively associated with the market firm performance. Thereafter, a difference in difference model is applied to separate the connected and non-connected firms. Such a method is most likely to determine the factors driving the market performance of politically connected firms. Hence, results reveal that leverage, age and equity holdings increase the market performance of politically connected firms.

Suggested Citation

  • Bencheikh Fayrouz & Taktak Neila Boulila, 2017. "The Effect of Political Connections on the Firm Performance in a Newly Democratised Country," Mediterranean Journal of Social Sciences, Sciendo, vol. 8(4), pages 40-46, July.
    • Handle: RePEc:vrs:mjsosc:v:8:y:2017:i:4:p:40-46:n:4
    DOI: 10.1515/mjss-2017-0004
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    Cited by:

    1. Rihem Braham & Christian Peretti & Lotfi Belkacem, 2019. "Do political connections affect bank leverage? Evidence from some Middle Eastern and North African countries," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(4), pages 989-1006, December.
    2. Rihem Braham & Christian Peretti & Lotfi Belkacem, 2022. "On the Measurement and Extent of Banks’ Political Connection in the Middle East and North Africa Region," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(4), pages 606-645, December.

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