Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223834
Authors: 
Green, Colin P.
HomRoy, Swarnodeep
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers 13392
Abstract: 
In 2002, an amendment to UK parliamentary regulations removed restrictions on the participation of members of parliament (MPs) in parliamentary proceedings related to their corporate interests. Using this amendment as a quasi-natural experiment, we demonstrate gains in firm value and profitability for firms with prior connections to MPs. These benefits are higher for firms with family ownership and lower accounting transparency. Both firms and politicians to change their behaviour. Post-amendment, firms are more likely to appoint MPs and also reduce political donations. Politicians with corporate connections were more likely to both become members of, and conditional on this, attend meetings of parliamentary select and joint committee. Our results highlight mechanisms of returns from political influence in well-developed institutional contexts.
Subjects: 
political connections
board of directors
firm value
JEL: 
G14
D72
G18
G30
Document Type: 
Working Paper

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