Political Connections, Family Ownership, and Firm Performance: An Emerging Economy

Shahzad Hussain

Abstract:

Emerging economies are characterised by a high proportion of family-owned businesses, significant political corruption, and a weak legal system which creates a more favourable environment for politically-connected family firms. Hence, we investigate the effect of political connections on firm performance in family and non-family-owned firms through advanced panel estimation techniques. Our result is based on a sample of publicly listed 150 non-financial firms from Pakistan Stock Exchange (PSX) over the period 2013–2018. We demonstrate that politically connected family-owned firms perform better than non-family owned connected firms. These findings have important policy implications for countries such as Pakistan which have experienced recent increases in the number of family-owned firms

research from:

• Foundation University - Faculty of Management Sciences

Year:

2021

Type of Publication:

Article

Keywords:

political connections; ROA; firm performance

Journal:

international journal of economics of business

Volume:

28

Number:

1

DOI:

doi.org/10.1080/13571516.2021.1941715