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Do Politically Connected Outside Directors Influence Firm Performance?
  • 이준엽 ;
  • 이은서 ;
  • 심형섭 ;
  • 조두영
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Publication Year
2018-02
Journal
회계와 정책연구
Publisher
한국회계정책학회
Citation
회계와 정책연구, Vol.23 No.1, pp.79-104
Keyword
politically connected outside directorsfirm performancemonitoring/advising viewRubber-Stamp view관료출신 사외이사기업의 재무성과모니터링 가설이익침해가설
Abstract
[Purpose]This study investigates how the politically connected outside directors affect firm performance. <br>[Methodology]The control and firm performance variables are obtained from the DataGuide and TS2000. The data of politically connected outside directors are manually hand-collected from annual reports available in DART. We examine the KOSPI manufacturing firms from 2011 to 2015 and use propensity score matched pair research method. <br>[Findings]We find that politically connected outside directors play an important role in improving a firm’s Tobin’s Q, operating cash flow, and return on assets. This result supports the monitoring/advising view, suggesting that politically connected outside directors may have a positive effect on firm performance. <br>[Implications]This study contributes to the understanding of the link between political connections and firm performance. Given that academic studies on the effect of political connections on firm performance remain ambiguous, our findings indicate that politically connected outside directors help firms improve valuation and accounting performance in Korea.
ISSN
2635-8611
Language
Eng
URI
https://aurora.ajou.ac.kr/handle/2018.oak/34743
DOI
https://doi.org/10.21737/kjar.2018.02.23.1.79
Type
Article
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Lee, Junyoup  Image
Lee, Junyoup 이준엽
Department of Business Administration
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