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Do different types of political connections affect corporate investments? Evidence from Malaysia

journal contribution
posted on 31.03.2021, 05:38 by Dinh Phan, CM Tee, VT Tran
© 2019 Elsevier B.V. In this study, we examine whether corporate investments are influenced by political connections. Using recent hand-collected data, we find that politically-connected firms are associated with higher levels of corporate investments. Particularly, corporate investments by politically-connected firms are twice the size of non-politically-connected firms. Furthermore, the effect is stronger for government-linked firms, firms with politically-connected controlling shareholders and older politically-connected firms. From the firm's characteristic perspective, the influence of political connections on corporate investments is stronger in larger firms and firms with higher bargaining power. Our findings remain unchanged despite been subjected to a wide range of robustness tests.

Funding

Tee Chwee Ming is supported by the Monash University Malaysia Seed Grant (B-7-17 and B-10-17)

History

Publication Date

01/03/2020

Journal

Emerging Markets Review

Volume

42

Article Number

100667

Pagination

13p.

Publisher

Elsevier

ISSN

1566-0141

Rights Statement

The Author reserves all moral rights over the deposited text and must be credited if any re-use occurs. Documents deposited in OPAL are the Open Access versions of outputs published elsewhere. Changes resulting from the publishing process may therefore not be reflected in this document. The final published version may be obtained via the publisher’s DOI. Please note that additional copyright and access restrictions may apply to the published version.

Licence

Exports