10.25440/smu.12300884.v1
Jinbo WANG
Jinbo
WANG
Birds of a feather sing together: Politically connected director clustering and its impact on firm performance
SMU Research Data Repository (RDR)
2020
PCD clustering
board of directors
political ties
firm performance
corporate governance
Organisation and Management Theory
Business and Management not elsewhere classified
2020-05-14 09:49:33
Thesis
https://researchdata.smu.edu.sg/articles/thesis/Birds_of_a_feather_sing_together_Politically_connected_director_clustering_and_its_impact_on_firm_performance/12300884
<table><tr>
<td><p>The
economic effects of firm’s political ties have attracted increasing scholarly
attention in recent years. Different from prior research, this paper
investigate the impact of political ties on firm performance for the lens of
politically connected directors (PCD) clustering, which is a pervasive
phenomenon in emerging economies but is ignored by academic researchers. This
phenomenon enables us to build up a unified theoretical framework that
considers the asset effect and liability effect of political ties at the same
time. We hypothesize and find that there is a curvilinear relationship
between firm performance and PCD clustering. Additionally, we find that there
are many factors that affect PCD clustering. For instance, PCD clustering may
reflect firms’ historical burden, the industry needs, the bargaining power of
the largest shareholders, as well as CEOs’ preference.</p></td></tr></table>