Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101817
Authors: 
Domadenik, Polona
Prašnikar, Janez
Svejnar, Jan
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8321
Abstract: 
In this paper we present and test a theory of how political corruption, found in many transition and emerging market economies, affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. We test this prediction on an almost complete population of Slovenian joint stock companies with 100 or more employees. Using the supervisory board structure, together with balance sheet and income statement data for 2000-2010, we show that a higher share of politically connected supervisory board members leads to lower productivity.
Subjects: 
corruption
corporate governance
productivity
politicians
state owned enterprises
JEL: 
D2
D21
D73
G34
L32
Document Type: 
Working Paper

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