Political ties and corporate performance: why efficiency matters?
Purpose – The purpose of this paper is to examine and explain the complex interrelationships which influence the performance of politically connected firms to create value for their providers of finance and other stakeholders. In doing so, it examines the interrelationships between efficiency and de...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2021-10-01
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| Series: | Journal of Business and Socio-Economic Development |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/JBSED-03-2021-0023/full/pdf |
| _version_ | 1827907102955274240 |
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| author | Rabia Najaf Khakan Najaf |
| author_facet | Rabia Najaf Khakan Najaf |
| author_sort | Rabia Najaf |
| collection | DOAJ |
| description | Purpose – The purpose of this paper is to examine and explain the complex interrelationships which influence the performance of politically connected firms to create value for their providers of finance and other stakeholders. In doing so, it examines the interrelationships between efficiency and delivering on corporate performance of a firm with political ties. Design/methodology/approach – The authors gathered the literature from the Scopus website. They reviewed the literature of 58 manuscripts about the efficiency and performance of politically connected firms. Findings – The research finds that the better quality of efficiency of politically connected firms is positively related to the corporate performance of politically connected firms. The authors’ theoretical findings corroborate the political theory, agency theory, stakeholder theory, resource dependency theory and stewardship theory. These theories prove that political connections have an impact on firm performance as a politician reinforces the efficacy. To better understand the effect of political connections on solid performance due to efficiency, this study classifies various efficiencies and links them with political ties. Research limitations/implications – Several avenues of research are suggested to examine further the interrelationships identified. Practical implications – The authors’ conceptual findings are valuable for institutional investors, policymakers and stakeholders. To sum up, all theoretical shreds of evidence prove that politically connected firms can enhance performance via efficiency. Originality/value – The paper conceptualizes the efficiency and performance interrelationships of politically connected firms. The extant literature comparison allows an assessment of the extent to which different efficiency contexts lead to differences in performance. |
| first_indexed | 2024-03-13T01:05:15Z |
| format | Article |
| id | doaj.art-c0fe9caf3eb24c2882d708907a065c32 |
| institution | Directory Open Access Journal |
| issn | 2635-1374 2635-1692 |
| language | English |
| last_indexed | 2024-03-13T01:05:15Z |
| publishDate | 2021-10-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | Journal of Business and Socio-Economic Development |
| spelling | doaj.art-c0fe9caf3eb24c2882d708907a065c322023-07-06T07:41:45ZengEmerald PublishingJournal of Business and Socio-Economic Development2635-13742635-16922021-10-011218219610.1108/JBSED-03-2021-0023Political ties and corporate performance: why efficiency matters?Rabia Najaf0Khakan Najaf1Sunway University, Subang Jaya, MalaysiaBusiness School, Sunway University, Subang Jaya, MalaysiaPurpose – The purpose of this paper is to examine and explain the complex interrelationships which influence the performance of politically connected firms to create value for their providers of finance and other stakeholders. In doing so, it examines the interrelationships between efficiency and delivering on corporate performance of a firm with political ties. Design/methodology/approach – The authors gathered the literature from the Scopus website. They reviewed the literature of 58 manuscripts about the efficiency and performance of politically connected firms. Findings – The research finds that the better quality of efficiency of politically connected firms is positively related to the corporate performance of politically connected firms. The authors’ theoretical findings corroborate the political theory, agency theory, stakeholder theory, resource dependency theory and stewardship theory. These theories prove that political connections have an impact on firm performance as a politician reinforces the efficacy. To better understand the effect of political connections on solid performance due to efficiency, this study classifies various efficiencies and links them with political ties. Research limitations/implications – Several avenues of research are suggested to examine further the interrelationships identified. Practical implications – The authors’ conceptual findings are valuable for institutional investors, policymakers and stakeholders. To sum up, all theoretical shreds of evidence prove that politically connected firms can enhance performance via efficiency. Originality/value – The paper conceptualizes the efficiency and performance interrelationships of politically connected firms. The extant literature comparison allows an assessment of the extent to which different efficiency contexts lead to differences in performance.https://www.emerald.com/insight/content/doi/10.1108/JBSED-03-2021-0023/full/pdfEfficiencyPerformancePolitically-connectedAgency theory |
| spellingShingle | Rabia Najaf Khakan Najaf Political ties and corporate performance: why efficiency matters? Journal of Business and Socio-Economic Development Efficiency Performance Politically-connected Agency theory |
| title | Political ties and corporate performance: why efficiency matters? |
| title_full | Political ties and corporate performance: why efficiency matters? |
| title_fullStr | Political ties and corporate performance: why efficiency matters? |
| title_full_unstemmed | Political ties and corporate performance: why efficiency matters? |
| title_short | Political ties and corporate performance: why efficiency matters? |
| title_sort | political ties and corporate performance why efficiency matters |
| topic | Efficiency Performance Politically-connected Agency theory |
| url | https://www.emerald.com/insight/content/doi/10.1108/JBSED-03-2021-0023/full/pdf |
| work_keys_str_mv | AT rabianajaf politicaltiesandcorporateperformancewhyefficiencymatters AT khakannajaf politicaltiesandcorporateperformancewhyefficiencymatters |