Political Connections, Family Ownership, and Firm Performance: An Emerging Economy. Issue 3 (2nd September 2021)

• Record Type: Journal Article
• Authors: Ullah, Sabeeh; Khan, Sumaira; Hussain, Shahzad; Alam, Mehtab; Haroon, Muhammad
• Is Part Of: International journal of the economics of business. Volume 28:Issue 3(2021)
• Page Start: 471
• Page End: 487
• Publication Date: 2021-09-02
• Subjects: Political connections -- firm performance -- ROA -- family and non-family firms; G32 -- G34; Economics -- Periodicals; Business -- Periodicals; 338.5024658
• DOI: 10.1080/13571516.2021.1941715
• Languages: English
• ISSNs: 1357-1516

Abstract

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.