Political connections and the cost of equity capital
Motivated by recent research on the costs and benefits of political connection, we examine the cost of equity capital of politically connected firms. Using propensity score matching models, we find that politically connected firms enjoy a lower cost of equity capital than their non-connected peers....
محفوظ في:
| المؤلف الرئيسي: | |
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| مؤلفون آخرون: | , , |
| التنسيق: | article |
| منشور في: |
2012
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| الموضوعات: | |
| الوصول للمادة أونلاين: | http://hdl.handle.net/11073/8654 |
| الوسوم: |
إضافة وسم
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| _version_ | 1864513440694927360 |
|---|---|
| author | Boubakri, Narjess |
| author2 | Guedhami, Omrane Mishra, Dev Saffar, Walid |
| author2_role | author author author |
| author_facet | Boubakri, Narjess Guedhami, Omrane Mishra, Dev Saffar, Walid |
| author_role | author |
| dc.creator.none.fl_str_mv | Boubakri, Narjess Guedhami, Omrane Mishra, Dev Saffar, Walid |
| dc.date.none.fl_str_mv | 2012-01 2016-11-09T05:50:47Z 2016-11-09T05:50:47Z |
| dc.format.none.fl_str_mv | application/pdf |
| dc.identifier.none.fl_str_mv | Boubakri, Narjess, Guedhami O, Mishra D, Saffar W.. "Political connections and the cost of equity capital." Journal of Corporate Finance (January, 2012) 0929-1199 http://hdl.handle.net/11073/8654 10.1016/j.jcorpfin.2012.02.005 |
| dc.language.none.fl_str_mv | en_US |
| dc.publisher.none.fl_str_mv | Elsevier |
| dc.relation.none.fl_str_mv | Journal of Corporate Finance http://dx.doi.org/10.1016/j.jcorpfin.2012.02.005 |
| dc.subject.none.fl_str_mv | Political connections Corporate governance Cost of capital |
| dc.title.none.fl_str_mv | Political connections and the cost of equity capital |
| dc.type.none.fl_str_mv | info:eu-repo/semantics/publishedVersion info:eu-repo/semantics/article |
| description | Motivated by recent research on the costs and benefits of political connection, we examine the cost of equity capital of politically connected firms. Using propensity score matching models, we find that politically connected firms enjoy a lower cost of equity capital than their non-connected peers. We find further that political connections are more valuable for firms with stronger ties to political power. In additional analyses, we find that the effect of political connection on firms' equity financing costs is influenced by the prevailing country-level institutional and political environment, and by firm characteristics. Taken together, our findings provide strong evidence that investors require a lower cost of capital for politically connected firms, which suggests that politically connected firms are generally considered less risky than non-connected firms. |
| format | article |
| id | aus_e2b3286b8aa206ec9160b6bc84622d76 |
| identifier_str_mv | Boubakri, Narjess, Guedhami O, Mishra D, Saffar W.. "Political connections and the cost of equity capital." Journal of Corporate Finance (January, 2012) 0929-1199 10.1016/j.jcorpfin.2012.02.005 |
| language_invalid_str_mv | en_US |
| network_acronym_str | aus |
| network_name_str | aus |
| oai_identifier_str | oai:repository.aus.edu:11073/8654 |
| publishDate | 2012 |
| publisher.none.fl_str_mv | Elsevier |
| repository.mail.fl_str_mv | |
| repository.name.fl_str_mv | |
| repository_id_str | |
| spelling | Political connections and the cost of equity capitalBoubakri, NarjessGuedhami, OmraneMishra, DevSaffar, WalidPolitical connectionsCorporate governanceCost of capitalMotivated by recent research on the costs and benefits of political connection, we examine the cost of equity capital of politically connected firms. Using propensity score matching models, we find that politically connected firms enjoy a lower cost of equity capital than their non-connected peers. We find further that political connections are more valuable for firms with stronger ties to political power. In additional analyses, we find that the effect of political connection on firms' equity financing costs is influenced by the prevailing country-level institutional and political environment, and by firm characteristics. Taken together, our findings provide strong evidence that investors require a lower cost of capital for politically connected firms, which suggests that politically connected firms are generally considered less risky than non-connected firms.Elsevier2016-11-09T05:50:47Z2016-11-09T05:50:47Z2012-01info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfBoubakri, Narjess, Guedhami O, Mishra D, Saffar W.. "Political connections and the cost of equity capital." Journal of Corporate Finance (January, 2012)0929-1199http://hdl.handle.net/11073/865410.1016/j.jcorpfin.2012.02.005en_USJournal of Corporate Financehttp://dx.doi.org/10.1016/j.jcorpfin.2012.02.005oai:repository.aus.edu:11073/86542024-08-22T12:16:00Z |
| spellingShingle | Political connections and the cost of equity capital Boubakri, Narjess Political connections Corporate governance Cost of capital |
| status_str | publishedVersion |
| title | Political connections and the cost of equity capital |
| title_full | Political connections and the cost of equity capital |
| title_fullStr | Political connections and the cost of equity capital |
| title_full_unstemmed | Political connections and the cost of equity capital |
| title_short | Political connections and the cost of equity capital |
| title_sort | Political connections and the cost of equity capital |
| topic | Political connections Corporate governance Cost of capital |
| url | http://hdl.handle.net/11073/8654 |