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This paper aims to explore whether the over-reliance on political resources hampers corporate technological innovation and the role of environmental regulation in mitigating the adverse effect. A simplified theoretical framework is proposed to combine political ties, environmental regulations, and corporate innovation. Then, based on the data for listed private companies in China's heavy pollution industry, our empirical results show that political relations have negative impacts on both patent licensing and R&D investment, indicating the existence of a political resource curse in listed private companies in China's heavy pollution industry. The transmission mechanisms include mitigating market competition and inducing overinvestment, but increasing the rent-seeking motivation is not a channel through which political connections negatively affect corporate innovation. Further empirical analysis demonstrates that environmental regulations help eliminate the curse effect of political ties on technological innovation at the firm level in China, through increasing market competition and reducing overinvestment. The findings of this paper provide insights for optimizing environmental regulation policies, which are conducive to inducing technical innovation in politically connected enterprises. [ABSTRACT FROM AUTHOR]

Anticorruption is a prevalent global phenomenon and has yielded many good results. This study empirically tests the real effect of China's anticorruption on corporate acquisition premiums and explores its mechanisms. We find that after the exposure of and crackdown on corrupt provincial officials, firms without political connections had lower mergers and acquisitions (M&A) premiums than those with political connections. Cross‐sectional test results show that when firms are private or in areas with high marketization, the anticorruption event has a greater impact on their acquisition premiums. The channel test demonstrates that anticorruption reduces the value of political connections and improves the negotiation advantages of nonpolitically connected firms, enabling them to pay lower M&A premiums. Our findings indicate that anticorruption can create a considerably fair business environment. Moreover, we confirm the real effects of anticorruption on the distortion of resource allocation at the firm level. Finally, the results of this research have policy implications for the world's largest emerging market. [ABSTRACT FROM AUTHOR]

Research Summary: We examine how geopolitical volatility—the instability of bilateral political affinity between countries—affects foreign subsidiary investments. Building on prior work that shows that the level of political affinity between countries facilitates foreign investments, we argue that the volatility of political affinity impedes firms' ability to form expectations about stakeholder behavior and reduces subsequent investments in subsidiaries. We further argue that the effect of volatility of political affinity on foreign subsidiary investments is less pronounced when the level of political affinity between countries is high and when the firm has strong political connections at home. Our analyses examine 1054 US firms and their subsidiary investments in 106 countries from 2000 to 2015. Managerial Summary: Geopolitical risk has emerged as an important factor in foreign investment decisions in recent years. The rise of geopolitical tensions worldwide and the fragmentation of relationships between countries have introduced new dimensions to foreign investment risks. We study the propensity for sudden and unpredictable shifts in the political relationship between countries—that is, volatility of political affinity in their bilateral political relations—and its effect on firms' foreign subsidiary investments. We show that volatility of political affinity negatively affects the number of subsidiaries, employees, and local sales in the host country because when bilateral relations change suddenly, it is more difficult for multinational firms to predict how stakeholder behavior will impact the performance of their investments. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of political connections on the performance of Korean chaebol companies. We use two indicators to measure the ability and diversity of political connections and find that chaebol companies are more likely to establish political connections compared to non-chaebol firms, which gives them an advantageous position in government procurement bidding. Significantly, our findings indicate that political connections correlate positively with the monetary value of government contracts secured by chaebols, underscoring the direct economic benefits of these connections. Overall, our study sheds light on the motivation for the political networks of chaebol firms and contributes to a better understanding of the direct benefits of political connections. [ABSTRACT FROM AUTHOR]

This study investigates the impact of audit quality, internal audit organizational structure, political connections, and company size on litigation risk in the consumer goods industry sector listed on the Indonesia Stock Exchange during the period from 2017 to2022. A quantitative approach was used by applying Fixed Effects, Ordinary Least Squares, Random Effects, and Robust Regression analysis simultaneously to analyze panel data. The results showed that high audit quality serves as a significant positive signal in reducing the risk of lower litigation, providing confidence to stakeholders that financial statements can be more reliable and free from material misstatement. Meanwhile, a better internal audit organizational structure introduces complexity in the management of litigation risk as the organization grows, highlighting the possibility of more complicated implications in the context of signals, when internal audit placement does not fit the needs of the organization. Political connections and company size provide positive signals regarding litigation risk, albeit with different levels of significance, indicating complexity in the dynamics of political signals and company size. The findings of this study can guide stakeholders in the appointment of agents to manage the company. [ABSTRACT FROM AUTHOR]

I study whether firms that receive targeted U.S. state‐level subsidies are more likely to subsequently engage in corporate misconduct. I find that firms are more likely to engage in misconduct in subsidizing states, but not in other states that they operate in, after receiving state subsidies. Using data on both federal and state enforcement actions, and exploiting the legal principle of dual sovereignty for identification, I show that this finding reflects an increase in the underlying rate of misconduct and that this increase is attributable to lenient state‐level misconduct enforcement. Collectively, my findings present evidence of an important consequence of targeted firm‐specific subsidies: nonfinancial misconduct that potentially could impact the very stakeholders subsidies are ostensibly intended to benefit. [ABSTRACT FROM AUTHOR]

Nonprofit organizations receive charitable contributions from both institutional donors and individual donors. Existing studies have traditionally focused on factors related to nonprofits' total donation income rather than exploring similarity and difference in the two types of donors' preference for donation recipients. Following Wang's in Nonprofit and Voluntary Sector Quarterly, 52(3), 787–816 (2023) call for the distinction between institutional donors (i.e., corporations) and individual donors, this study regresses corporate giving and individual giving separately on four themes of explanatory variables, namely organizational legitimacy, political connections, organizational attributes, and environmental factors, of a sample of 2,021 Chinese foundations for the year 2013. The results showed that multiple variables are related to corporate giving and individual giving differently to varying degrees. This study suggests future research (1) consider the potentially different effects of predictors on multiple sources of giving when analyzing nonprofits' total donation income and (2) theorize the different preferences of the two types of donors. [ABSTRACT FROM AUTHOR]

Why do citizens prefer to utilize personal connections (e.g. guanxi) with government officials to access public services? Conventional wisdom suggests that improvements in formal institutions can reduce the popularity of informal behaviors; however, limited research has explored the relevant roles of e-government and anticorruption endeavors. Thus, based on survey data from 30 Chinese municipalities and multilevel regression designs, this study shows that citizens in cities with higher e-government development levels or who perceive governments' anticorruption efforts to be effective are less likely to perform guanxi practices. The negative effect of e-government is also more salient among individuals with political connections. Therefore, this study contributes to the ongoing discussion on the relationship between formal institutions and guanxi practices by revealing the specific ways in which e-government development and anticorruption efforts lessen individuals' reliance on guanxi. [ABSTRACT FROM AUTHOR]

Politically connected firms critically rely on their sociopolitical capital to compete; however, a policy-induced loss of board political connections may pose a serious challenge for focal firms and prompt them to develop compensatory moves. Drawing upon resource dependence theory and the nonmarket strategy literature, we examine if and how focal firms may address this challenge through intensifying their bribery activities. Following a year 2013 policy shock that closed the revolving door between former government officials and connected firms in China, we identify a substantial increase of bribery expenditure in a sample of public corporations whose political independent directors were forced by the central government to resign in the subsequent years. Furthermore, we investigate how the strength of this response varies with a host of firm-level contingencies that capture dependence scope and dependence asymmetry in the business-government dyad at the time of the policy announcement. Our study contributes to strategy and governance literatures by demonstrating how firms restructure power relationships after the loss of board political capital. It also sheds light on the regulation of revolving doors under weak institutions by revealing the irony of a well-intentioned "anticorruption" government policy. [ABSTRACT FROM AUTHOR]

Past business ethics research highlights negative perceptions about corporate governance of family firms, and yet many auditors evaluate family businesses favorably and charge them lower audit fees; however, this inconsistency remains unexplained. Moreover, the impact of family firms' political connections and board gender diversity on audit fees is still not clear. Based on the data from listed Chinese family firms, we address these important research gaps by using the local institutional environment in which the client operates as a moderator of the process by which auditors assess the implications of clients' political connections. Political connections reduce audit fees when a client is located in a region with high-quality public administration. Female representation in audit committees positively moderates the relationship between political connections and audit fees, as female committee members react to their firms' political connections by demanding higher levels of assurance from auditors. Female committee members also demand higher audit efforts for family firms managed by non–family-member CEOs. [ABSTRACT FROM AUTHOR]

Purpose – This study aims to analyse the political connections of Portuguese companies through the members of the board of directors, exploring how these connections influence, in particular, the composition and characteristics of the boards. Design/methodology/approach – The research used a strategy based on analysing the financial statements and curriculum vitae of the directors of Portuguese companies listed on Euronext Lisbon from 2014 to 2019. The political connections of board members were examined, considering the variables identified in the existing literature. Findings – The results indicate that companies with political connections maintain these relationships for long periods and have a greater number of members on the board of directors compared to companies without such connections. Directors with political experience tend to occupy non-executive positions, suggesting that companies may value political contacts more than the management skills of these directors. It was also found that there are politically connected directors who belong to multiple boards and that women appointed to the board are less likely to have a political background, reflecting male dominance in Portuguese politics. Research limitations/implications – The main limitations of this study include the small number of listed companies in the sample, which may affect the statistical robustness of the results, as well as the use of secondary sources, which may not capture all relevant policy linkages. In addition, the results are specific to the Portuguese context and may not be generalisable to other countries or other regions of the world. Originality/value – This study contributes to the understanding of political connections in Portuguese companies, offering valuable insights into how these connections influence board composition and can impact corporate strategy and governance. The findings of this study can be especially useful for business leaders looking to optimise the formation of their boards of directors.

Economic policy uncertainty (EPU) may pose a risk or provide an opportunity for corporations. This study empirically investigates the impact of EPU on the corporate innovation of Chinese firms using patent information as a proxy for corporate innovation. The study then examines whether family ownership and political connections impede/boost corporate innovation. Using a longitudinal panel dataset of 3,085 Chinese firms listed during the period from 2009 to 2020, the study observes that EPU enhances corporate innovation in China. The study also finds that family firms negatively impact innovative projects during EPU. The study then shows that political connections positively moderate the effects of EPU on corporate innovation. The results of the study are robust to time and industry fixed effects, endogeneity issues, and firm-level time-varying factors. [ABSTRACT FROM AUTHOR]

Using the data of 3319 Chinese listed companies from 2007 to 2019, this study examines how companies performed under the stress of regional environmental regulations. We discover that increased regional environmental regulation intensity efficiently lowers companies' idiosyncratic risk with empirical process. This result proves that environmental regulation pressure could bring unexpected benefits to business situation of companies, which is reconfirmed through several robustness tests. The mechanism analysis further demonstrates that internal governance, rather than managerial shortsightedness and added environmental investment, strengthens the benefits, among internal factors. Moreover, this relationship is more noticeable for non-energy and non-state-owned firms, while linkages with bank or government are found to be ineffective on this issue. The R&D investment of local companies above designated size performs better than other two external factors (regional legal governance, investment on technology and education). Our study verifies an unattended role of environmental regulation on the companies' idiosyncratic risk, revealing that the environmental initiatives of regional governments do not always adversely affect local companies. Our study could facilitate the strategic arrangements of policymakers, businesses, investors, and other stakeholders [ABSTRACT FROM AUTHOR]

This study investigates the impact of board characteristics on the relationship between political connections and cash holdings in Asian countries. The findings suggest that Asian firms with political connections, large boards, and gender diversity have lower cash holdings, while firms with CEO duality have higher cash holdings. Further, the study provides unique evidence that Asian firms with large boards and gender diversity have a moderating effect and strengthen the negative influence of political connections on cash holdings. We also find that CEO duality moderates the influence of political connections on cash holdings in Asian countries. The authors conclude that strong board monitoring and governance mechanisms are crucial for the effective use of cash, particularly in firms with political connections. This research contributes to the literature by presenting novel evidence that board characteristics critically influence the relationship between political connections and cash holdings in the Asian context. [ABSTRACT FROM AUTHOR]

Do forms of state ownership and politically connected senior management affect the incidence of financial statement fraud? In this study, we consider these questions and provide new evidence as to the factors influencing fraud commission and detection for Chinese listed firms between 2007 and 2018. Six major types of financial statement fraud activities are identified. Using a bivariate probit model, developed to address partial observability concerns, we report state ownership lowers the likelihood of fraud detection, while increasing a firms' propensity to commit fraud. In addition, state-owned enterprises (SOEs) controlled by local government are more likely to engage in fraud and escape regulatory punishments, relative to SOEs controlled by central government. The effect of politically connected senior management over fraud commission or regulatory detection is also diluted by the presence of state ownership. Moreover, the role of state ownership in encouraging fraud commissions and escaping from regulatory punishments is more pronounced for the local non-politically connected SOEs. [ABSTRACT FROM AUTHOR]

Abstract This research aims to enlighten current and future research trends on political connections by providing complete bibliometric mapping through network studies on political connections. Utilizing Biblioshiny, the Bibliometrics R package, multi-perspective research publications on political connections from 2003 to the third quarter of 2023 were discovered and analyzed. This bibliometric analysis provides valuable insights regarding current and future publications on political connections. The most prolific contributors, the most used keywords, the most productive countries and sources, the most cited publications, and the most productive sources of information are network analysis data about co-occurrence networks. The discourse revolves around issue mapping data on political connection studies. The search method used to find related literature is the Scopus database. This research contributes valuable information to help other researchers map ongoing and future investigations into political connections. This bibliometric analysis of 294 documents is the first regarding political connections known to researchers. This evaluation emphasizes annual publication trends, authors, publications, countries, organizations, and most productive sources, determining potential future research objectives. The research on political connections was published in early 2003. No papers were released on this subject for 3 years after 2003 (2003–2005), which shows that the growth of this academic field slowed down for ten years. There were significant changes in 2011, and many more linked papers have been released. Authors from the USA and China significantly contributed to the initial scientific journal papers on their political connections. Hong Kong, China, and Australia are recognized as leading nations in scholarly contributions to studying political connections. Chinese scholars spearheaded the collaborative publication effort focused on political connections, with the USA and Australian experts following suit. Based on indexed terms, political connections, sustainable development, and financial performance are trending keywords. These results show possible directions for further research into political connections.

Tax avoidance is an effort taken to reduce tax liabilities and maximize after-tax income that is carried out legally and safely for taxpayers because it does not conflict with tax provisions. The purpose of this study is to analyze the effect of transfer pricing, political connections, on tax avoidance with profitability as a moderating variable in multinational companies in the manufacturing sector listed on the Indonesia Stock Exchange in 2018-2022. The data obtained in this study come from the annual reports of multinational companies in the manufacturing sector listed on the Indonesia Stock Exchange in 2018- 2022. The data analysis technique used in this study was purposive sampling and obtained 66 companies with a research period of 5 years, namely 2018-2022 so that 330 samples were obtained. The analysis method used in this research is multiple linear regression analysis and MRA. The results of this study indicate that the transfer pricing variable has a negative effect on tax avoidance but the transfer pricing variable has a positive effect on tax avoidance with moderating profitability, while political connections have no effect on tax avoidance even with moderating profitability. [ABSTRACT FROM AUTHOR]

In China, firms actively participate in poverty alleviation to comply with the national policy and to build political connections. Whether firms curry favor with the government by increasing spending on poverty alleviation is an interesting research question under the context of anti-corruption campaigns. Using hand-collected data from the period 2016–2018, we examine how anti-corruption campaigns have influenced corporate poverty alleviation spending at the city level. Our results show that anti-corruption campaigns are positively related to corporate poverty alleviation spending. We further identify two possible channels through which the anti-corruption campaign increases corporate poverty alleviation spending: (1) political connections and (2) stock price crash risk. Finally, we find that the effects of the anti-corruption campaign on corporate poverty alleviation spending are stronger in firms located in cities with lower degrees of marketization, a lower media index, and a higher poverty rate, as well as in firms receiving fewer government subsidies. [ABSTRACT FROM AUTHOR]

The main objective of this research is to examine the impact of political connections on the relationship between corporate governance and management accounting in companies listed on the Tehran Stock Exchange. The statistical population includes listed companies during the period from 2008 to 2023. This study is descriptive-correlational and utilizes both parametric and non-parametric statistical models. Various machine learning methods, including random forests, decision trees, SVM, and neural networks, were used for data analysis. Results indicate that variables such as the percentage of institutional shareholders (IO) and the percentage of government ownership (GO), as indicators of political connections and corporate governance, have a significant impact on the application of management accounting. Additionally, the interaction of these two variables (IO*GO) shows high importance in the model, demonstrating the influence of political connections on the relationship between corporate governance and management accounting. Moreover, profitability (PROF) and company size (SIZE) were identified as important factors affecting the implementation of management accounting. The neural network analysis results show that political connections play a significant role in shaping the relationship between corporate governance and the application of management accounting. The composite variable IO*GO (interaction between institutional shareholders and government ownership) has shown the most significant impact on this relationship. These findings indicate the profound influence of political connections on governance structures and management decisions in Iranian companies. This research emphasizes the complexities arising from the intersection of political and economic interests, suggesting the need for a review of macroeconomic policies and the establishment of more effective regulatory mechanisms. This study can assist policymakers and regulatory bodies in improving transparency, increasing efficiency, and enhancing Iran's position in international business indices. In other words, the present research emphasizes the importance of reforming existing structures and creating effective control mechanisms in the country's macroeconomic policies. It also highlights the necessity of creating a healthy and fair competitive environment in Iran's economy and strengthening anti-monopoly and conflict of interest laws. This study can help policymakers and regulatory bodies improve the business environment, increase transparency, and enhance Iran's position in international indices. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between credit constraints encountered by small- and medium-sized enterprises (SMEs) and their propensity to engage in pollution prevention and control practices in developing and transition countries. Using data from the Enterprise Surveys conducted in 2018–2020 and applying a Poisson model, we find that credit rationing is negatively associated with SMEs' environmental performance. However, family ownership, human capital, and political networks seem to mitigate this negative relationship. Therefore, credit rationing appears particularly detrimental for the environmental footprint of those firms, which are less likely to pursue nonfinancial goals, and have a lower capability to seize green investment opportunities by successfully accessing and using alternative means of financing. Our study provides insights for policy makers to promote policy aimed at encouraging national and international financial institutions to provide SMEs funds for green practices. Moreover, governments should support training programs to improve SMEs employees' skills. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to analyse the impact of political connections and gender diversity on the performance of Iberian companies as a singular market and considering Portugal and Spain separately. Design/methodology/approach: The authors used panel data methodology, specifically GMM system estimation model by Arellano and Bond (1991) for the period from 2015 to 2020. Findings: Results show that the performance of listed Iberian companies is influenced by political connections, by gender diversity and that gender diversity has a mitigating effect on the effects of political connections in each country. The mitigating effect of women is evident in both Portugal and Spain, as they are more cautious and principled, which is valued by short-term investors interested in an immediate investment. However, considering the Iberian Peninsula as a whole, the results indicate that – in the long term – women's political relationships can benefit performance through a better reputation and image, which can lead to better social and economic results in the long term. Originality/value: To the best of the authors' knowledge, this paper is original and covers an important gap in the literature when considering political connections and women's impact on these connections as determinants of the performance of Iberian companies. [ABSTRACT FROM AUTHOR]

Prior research has argued that companies in transition economies engage in corporate social responsibility (CSR) activities to achieve political goals, such as building connections with the government. However, it is unclear why chief executive officers (CEOs) agree to make these politically driven CSR decisions that mainly benefit the controlling shareholders. We show that controlling shareholders may "bribe" the CEOs with greater compensation or perks—a form of economic rents extracted by the CEOs—to make CSR decisions, and such a pattern is more salient in local government-owned companies. We reason that these CSR activities reflect implicit contracting between the controlling shareholders and the CEOs. Through cross-section analyses, we find that the CEO's economic rents vary with local government fiscal needs, the firm's governance structure, and CEO power. Furthermore, we demonstrate that increases in CSR-linked compensation lead to a decline in shareholder value. Data Availability: All data are available from public databases identified in the paper. JEL Classifications: D72; M12; P26. [ABSTRACT FROM AUTHOR]

This paper explores the role of political connections in facilitating access to credit for firms in the Indian corporate sector. This study aims to address gaps in the literature by combining theoretical insights with empirical data. Our model proposes that political connections may reduce risk for firms, thereby enhancing their access to credit. Utilizing a unique dataset of S&P BSE 500 companies from 2001 to 2019, we analyze the extent of these connections and their impact on financial leverage and debt-to-asset ratios. Our findings reveal that politically connected firms, defined by their monetary donations to political parties and the inclusion of Members of Parliament on their boards, exhibit significantly higher financial leverage and debt-to-asset ratios than unconnected firms. This implies a lower perceived borrower's risk and an advantageous position in accessing credit, likely a result of their political ties. The implications of our findings extend to the realms of corporate governance, economic policy, and the broader understanding of emerging market dynamics. • Political connections, as part of non-market strategies of firms, may be crucial in accessing credit. • Our theoretical framework highlights role of risk and donation to political party by a firm in accessing credit. • This study constructs a novel dataset of political connections of Indian companies. • Political connections lead to more favorable borrowing-related outcomes of companies such as, financial leverage and debt-assets ratio. • Political connections specific to a particular political party tend to serve companies more (in terms of the aforementioned outcomes), when that particular party is in power. [ABSTRACT FROM AUTHOR]

This paper investigates how political connections affect the relationship between trade policy uncertainty and corporate investment by utilizing Chinese non-financial firm-level data from 2003 to 2022. We find that trade policy uncertainty inhibits corporate investment by decreasing expected cash flows, increasing cash flow uncertainty, and lowering investment returns. Political connections mitigate the adverse impact of trade policy uncertainty on corporate investment by increasing government subsidies, alleviating financing constraints, and improving investment inefficiency for firms. The results are robust to changing variables measurements, alternating econometric model settings, and addressing endogeneity concerns. We also find the adverse impact of trade policy uncertainty on corporate investment is more pronounced for non-state-owned firms and small-sized firms, and the positive role of political connections benefits firms with higher financing constraints, lacking bank-firm relationships, and regions with lower institutional quality. Our findings highlight that optimizing the business environment and strengthening the communication between firms and governments are crucial for coping with unexpected policy uncertainty shocks. [ABSTRACT FROM AUTHOR]

This paper examines whether state ownership and political connections affect the relationship between customer concentration and cash holdings for Chinese listed manufacturing firms. We show that non‐state‐owned firms, but not state‐owned firms, hold more cash as customer concentration increases. In addition, political connections weaken the positive effect of customer concentration on non‐state‐owned firms' cash holdings. Our supplemental analyses further show that for non‐state‐owned firms with limited access to finance—for instance, firms with low analyst following, low institutional ownership, or low government subsidies—the effects of political connections on weakening the positive association between customer concentration and cash holdings are more pronounced. Additional robustness tests support our arguments. [ABSTRACT FROM AUTHOR]

Understanding how firms cope with economic crises is of great importance, particularly in this period of rising interest rates coupled with a severe pandemic crisis. This study conducts an empirical analysis of firms in distress based on a large firm-level panel dataset containing detailed micro-level information on Chinese manufacturing firms. We study economic distress rather than financial distress. Moreover, we identify survival tactics adopted by distressed firms and the factors driving their choice of tactics. We show that three particular survival tactics help distressed firms recover, namely, reliance on fixed assets, reliance on intangible assets, and cost reduction. Furthermore, we show the critical role of institutional development in emerging economies, where institutions include product markets, financial markets, and legal institutions. [ABSTRACT FROM AUTHOR]

This study intends to examine the influence of ownership structure and political connections on tax avoidance using the Book Tax Differences (BTD) method. The data used is industrial entities registered on the IDX for the 2018-2022 period. By utilizing the proportional sampling method, the study sample that fulfilled the criteria was only 40 companies so that 200 observational data were obtained which were used as the study sample. Panel data regression analysis is the chosen analytical method in this research which includes the Chow test, Hausman test, and hypothesis testing using Eviews as a data analytics tool. The test results imply that (i) government ownership negatively impacts tax avoidance, (ii) institutional ownership positively impacts tax avoidance, (iii) family ownership positively impacts tax avoidance, (iv) foreign ownership shows a non-significant positive impact on tax avoidance, and (v) political connections exhibit a non-significant negative impact on tax avoidance. [ABSTRACT FROM AUTHOR]

Corporate governance and company value are essential issues in managing state-owned companies in Indonesia. This research examines the influence of corporate governance index and related-party transactions on the value of state-owned companies on the Indonesia Stock Exchange by analyzing the role of political connections as a moderating variable. The population of this research is all state-owned companies on the Indonesia Stock Exchange from 2015 to 2022. The research sample was obtained using a purposive sampling technique. Data analysis uses moderated regression analysis. This research found that, in the case of state-owned companies in Indonesia, the corporate governance index positively affected company value. In contrast, related-party transactions harmed company value. Political connections have not been proven to be a moderating variable in the influence of corporate governance index on company value. However, they are proven on the influence between related-party transactions and company value. Investors in the Indonesian capital market assess political connections in state-owned companies in Indonesia as increasing the risk that it will worsen the influence of related-party transactions and the value of state-owned companies.

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Prior research suggests that (1) politically active firms have an information advantage over firms that do not engage in the political process but also that (2) politically active firms are more likely to disclose policy-related information. We examine whether there are externalities associated with the processing of political information by politically active firms. We study this question in the setting of intraindustry information transfers around earnings announcements. Measuring firms' political activism using campaign contributions, we find stronger intraindustry information transfers from politically active firms to their industry peers. These information transfers are stronger when there is more discussion during conference calls of political topics that have industry- or market-wide implications. Similarly, these information transfers are also stronger when there is greater political uncertainty. Our paper highlights an important information externality related to politically active firms' disclosures and improves our understanding of how politically active firms affect their industries' information environment. Data Availability: The data used in this study are publicly available from the sources cited in the text. JEL Classifications: D72; M41; M48. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate whether socially responsible businesses with corporate social expenditure are less prone to engaging in tax avoidance. The study also examines whether political connections moderate the association between corporate social responsibility (CSR) and tax avoidance. Design/methodology/approach: The study uses ordinary least squares to analyse the panel data of all 30 listed banks on the Dhaka Stock Exchange covering 2012 to 2020. The study uses a set of alternative variables to check the robustness of the findings. Findings: Confirming the corporate culture theory, the study findings indicate that the higher the firms' CSR expenditure, the lower the tax avoidance. Contrarily, the moderating effect of political connection weakens the role of CSR in tax avoidance, implying that political relation makes the firms socially irresponsible. Besides, the findings document that firms with strong political connections are more likely to be tax aggressive by weakening the role of CSR. The findings imply that firms with weaker political connections are more socially responsible than firms with strong political ties. Research limitations/implications: The study provides the bank management and regulatory bodies valuable insights to take necessary actions so that they can easily monitor whether the banks follow their instructions regarding CSR and tax payments. As the politicians make the firm socially irresponsible, the regulatory bodies and bank management should not keep them or their relatives on the board. Originality/value: The study contributes to the CSR and tax avoidance literature considering the moderating role of political connections in Bangladesh banking sector. [ABSTRACT FROM AUTHOR]

The graduate approach applied in China for the economic transition poses the risk of continued government influence on the market. The land reform and the following adjustment in China have introduced a seemingly complete market for residential land. However, a widely practiced coalition between the local developmental states and developers might impact residential land leasing in a more hidden way. Taking central Chengdu as the study area, this study takes the enterprise ownership and affiliations as two explanatory factors that impact the land leasing prices and builds an MGWR model to evaluate the premium of political connections for the developers to obtain the land. The result gives a clue to the local protectionism and preference for state-owned enterprises that might exist in land leasing in Chengdu. It is proved in this study that the average purchase price by state-owned enterprises is 8.9% lower than the prices that private enterprises could enjoy, and the average land leasing price by local enterprises is 14.2% lower than that enjoyed by non-local enterprises. The preceding conceptual and empirical discussion in this study advocates for a review and rethinking of the public sector's intervention in China's land market. In-depth analyses of the factors that define the land leasing behaviors of the local government are needed. [ABSTRACT FROM AUTHOR]

Can firms extract policy concessions by hiring former members of Congress (MCs)? I argue that firms use personnel with a background in politics to keep regulators away. With an empirical focus on tax enforcement, I present comprehensive evidence that firms can use MCs to avoid regulatory enforcement. Hiring MCs decreases firm-level tax rates—highly connected MCs who served on committees responsible for tax policy produce the largest decrease. Leveraging a novel hand-coded dataset of tax audits, I show that hiring an MC is associated with a lower probability of being audited. The change in enforcement has important consequences: hiring an MC is associated with smaller fines and with uncertain tax positions being automatically accepted due to lapses in the statute of limitations. This indicates that rules are enforced differently against politically connected firms, shedding new light on the role of connections in the American political economy. [ABSTRACT FROM AUTHOR]

Securing long-term environmental pollution control in a system where local leaders in China hold tenure for only a short term is a challenge. The innovative Chinese accountability audit of natural resources (AANR) pilot project attempts to address this problem by mandating lifelong accountability for local leaders. Using this pilot as a quasi-natural experiment, we explored macro-effectiveness and micro-mechanisms of AANR. The results show that AANR has a positive impact on the environmental investment behaviour of enterprises. This paper finds that AANR stimulates enterprises' investments in the environment by improving the environmental behaviour of local leaders. During mobilisation meetings, local leaders convey signals on environmental matters. Political connections are bridges which convey the signals of mobilisation to enterprises. Those enterprises receive the signals and increase environmental investment. AANR thus promotes collaborative governance by ensuring that the interests of key stakeholders are aligned to prevent pollution. [ABSTRACT FROM AUTHOR]

This article empirically examines how political connections (PCs) affect a firm's media reaction after corporate fraud. Using data for Chinese listed companies from 2008 to 2021, we find that the media reports more positively for firms with PCs than for others that do not possess such advantages after the enforcement against fraud. The results are robust to a series of robustness checks and endogeneity corrections. When decomposing media reports, we find that PCs only facilitate positive media coverage but do not impede negative media coverage, which is more pronounced in state‐controlled media. This suggests that PCs protect firms' branding by facilitating positive media reports rather than withholding bad news. Moreover, we find this protective effect is more pronounced in firms with stronger PCs, weaker anti‐corruption regulation, lighter punishment for fraud, private ownership, and more donations. Further, the consequences analysis shows that this kind of protective effect significantly increases the probability of future fraud and stock price crashes. Our findings present a new perspective on the role of PCs and provide evidence for political bias in media coverage. [ABSTRACT FROM AUTHOR]

Numerous organizational researchers have acknowledged that COVID-19 reduced the profit in the tourism industry. Some tourism firms decreased the cost by reducing the investment of CSR in order to increase the profit. However, the relevant literature remains scarce. The main purpose of this study is to explore the effect of COVID-19 on CSR investment in the tourism industry. This study fills the gap between stakeholder and cost stickiness theories. Based on a quasi-experiment of listed Chinese tourism companies from 2017 to 2021, the study finds that COVID-19 caused tourism firms to increase strategic CSR and decrease a responsive one. In addition, tourism firms that adopted cost leadership strategies trimmed responsive CSR more than strategic CSR. Tourism firms with differentiation leadership strategies increased strategic and decreased responsive CSR. Tourism firms with higher levels of political connections increased responsive CSR, while tourism firms with higher organizational resilience increased strategic CSR. At the theoretical level, this study reveals the theoretical mechanism of COVID-19 on tourism firms' adjustment of CSR from the perspective of cost stickiness. On a practical level, it helps inform tourism firms' decision-making regarding CSR adjustments for sustainable development when they face widespread crisis scenarios. [ABSTRACT FROM AUTHOR]

We study the impact of an urban land titling program on firm investment in Shenzhen, China. We find that this program increased the investment rate for titling firms, but this positive effect only holds for politically connected firms. Further analysis suggests that the titling effect is more pronounced for those titling firms associated with greater expropriation risk. During program implementation, the connected titling firms increased their investment perhaps because, as observed, they experienced fewer disputes than non-connected titling firms. [ABSTRACT FROM AUTHOR]

This study examines the link between the political connections and financial performance of companies in Brazil and Canada, taking into account the moderating role of their country institutional factors. The authors use a comparative analysis of the largest listed companies in the two countries between 2010 and 2017 inclusive. There were four main results: (a) no significant difference was noted in the number of politically connected firms, although Brazilian companies were more politically connected on average than Canadian companies; a significant difference was noted between Brazil and Canada in terms of the number of politically connected directors and executive officers; (b) a significant and positive link emerged in both countries between political connections and firm performance, as measured by ROIC and ROA; (c) distinguishing between the political connections of directors and those of officers, a more significant positive association with performance was noticed in the latter; (d) most important, a clear and significant moderating role played by their country institutional factors was not apparent in the relationship between firms' political connections and performance. These latter results are mainly due to the lack of significant difference between the two countries in the number of politically connected firms. Contrary to expectations (and those of previous studies examining multicountry samples), the same effects from corporate political connections were shown in both countries. The study makes two important contributions. First, political connections seem to have become stronger than governance and institutional mechanisms, when it comes to controlling the behaviour of big corporations. Political connections have become so important that they influence the firm's management structure, whatever the institutional context; they seem to transcend governance mechanisms. Second, this study is among the first to demonstrate the need for investigating political connections at different firm levels; it shows the specific effect of political connections through executive officers rather than only through boards of directors, as is usually done. [ABSTRACT FROM AUTHOR]

This study investigates the moderating role of corporate governance in the relationship between political connections and investment efficiency. Using a sample of Malaysian publicly listed firms from 2001- 2017, we find that political connections are negatively correlated with firm investment efficiency. Moreover, the relationship is robust with the inclusion of corporate governance mechanisms, which moderated the potential consequences of agency problems in politically connected firms. The evidence suggests that corporate governance appears to be an effective mechanism to improve investment efficiency in politically connected firms. Consistent with the agency costs of free cash flow theory, we also discover that political connections have a more significant detrimental impact on overinvestment compared to their positive influence on underinvestment. Nevertheless, the interaction results in corporate governance hold regardless of overinvestment or underinvestment. Further analysis reveals that domestic institutional ownership, Big Four auditors, and audit committees are effective governance mechanisms, whereas similar observations do not hold for foreign institutional ownership, board size, board independence, and director ownership. Resultantly, high direct policy relevance is provided for governance practitioners and policymakers in monitoring the investment activities of PCFs.