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Literature Review on Political Connections

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The Financial Impact of Political Connections

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Abstract

This chapter provides an in-depth analysis of the existing literature related to political connections. First, a classification of the different measures of political connection employed in previous works is provided. Second, the main findings of studies related to this topic are summarized, showing that political connections are valuable in different ways. More specifically, they are associated with higher firms’ value and performance, preferential access to finance, and larger loans. Moreover, politically connected firms are more likely to be founded and bailed out. A group of papers shows a positive link between political connections and industry-level regulation. These studies generally refer to some highly regulated industries, while this book exhaustively investigates the link between political connections and industry-level regulation over 16 years (1999–2014) by selecting the most regulated industries in the United States. In addition, it investigates the market reaction to the dates of announcement of new political connections.

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Notes

  1. 1.

    As highlighted by Duchin and Sosyura (2012), the CPP is the first Troubled Asset Relief Program (TARP) initiative.

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Authors and Affiliations

  1. Università degli Studi Roma Tre, Rome, Italy

    Marika Carboni

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  1. Marika Carboni
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Carboni, M. (2017). Literature Review on Political Connections. In: The Financial Impact of Political Connections. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-52776-5_2

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  • DOI: https://doi.org/10.1007/978-3-319-52776-5_2

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  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-319-52775-8

  • Online ISBN: 978-3-319-52776-5

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

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