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董事及高階主管政治連結與公司績效之關聯性
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These definitions may not be inclusive, since political connections can also be obtained
through friendship and social networks that are difficult to measure.
5. Originality/Contribution
We expect our paper to make the following contributions. First, this study augments
Jang (2005) event-study approach to examine market reactions to firms’ appointments of
executives who are also legislators. We enlarge the scope of political connections and
consider the effect on long-term performance rather than just the announcement effect.
Second, this study further analyzes the influences of different types of political connections
as well as considers directors’ political affiliations and professional knowledge. Third, we
extend prior research that examines firms’ incentives to become politically connected. We
test and discover that firms with political connections have weaker performance regardless
of their incentives. Finally, our study also contributes to the corporate governance literature.
Prior literature generally examines various board and manager characteristics, focusing on
how composition and ownership structures might affect firm performance. However, none of
these studies investigate the political ties of the board of directors and top managers. We
believe the findings of our study have important implications to capital market participants
as well as corporate practices.