Political connectedness and firm performance: Evidence from Germany

Arbeitspapier

This paper investigates politically connected firms in Germany. With the introduction of a new transparency law in 2007, information on additional income sources for all members of the German parliament became publicly available. We find that members of the conservative party (CDU/CSU) and the liberal party (FDP) are more likely to work for firms than members of left-wing parties (SPD and The Left) or the green party (Alliance 90/The Greens). Politically connected firms are larger, less risky, and have lower market valuations than unconnected firms. They also have fewer growth opportunities, but slightly better accounting performance. On the stock market, connected firms significantly outperform unconnected firms in 2006, i.e. prior to the publication of the data on political connections. Differences in stock market performance are much smaller in 2007.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CFR Working Paper ; No. 07-15

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Information and Market Efficiency; Event Studies; Insider Trading ; General Financial Markets: Government Policy and Regulation ; Corporate Finance and Governance: General ; Corporate Finance and Governance: Government Policy and Regulation ; Public Economics: Miscellaneous Issues: Other ; Regulation and Business Law: Other ; Transactional Relationships; Contracts and Reputation; Networks
• Thema: Political Connectedness ; Firm Value ; Firm Performance

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Niessen, Alexandra ; Ruenzi, Stefan
• Ereignis: Veröffentlichung
• (wer): University of Cologne, Centre for Financial Research (CFR)
• (wo): Cologne
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/57749
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ