Political connections and performance: a study of firms listed on the BM&FBovespa

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Sílvio Parodi Oliveira Camilo
Rosilene Marcon
Rodrigo Bandeira-de-Mello


This research aims to contribute to the spread of organizational studies that combine performance and corporate governance. It utilizes the perspective of resource dependence to explain the political connections of firms as part of their relationships with their environments. In this context, we studied three proxies expressing political actions that influence performance: political campaign donations, recruiting members with backgrounds in politics to compose corporate administration (management and board), and interlocking activities between directors. The article presents a longitudinal study, structured according to presidential terms, for analysis of the period 1998 to 2009 of a sample composed of non-financial firms listed on the Stock Exchange of São Paulo (BM&FBovespa). To test the hypothesis, we used multivariate modeling of panel data and the fixed effects method, which considered the firms and time. The results show that political connections increase firm value, as measured by Tobin's Q (Models 1 and 2) and Market-to-book ratio (models 3 and 4). Firms make greater use of political connections in periods of increased political uncertainty. Such policy actions are perceived by the market and reflected in indicators, which are associated with risk and uncertainty.


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Camilo, S. P. O., Marcon, R., & Bandeira-de-Mello, R. (1). Political connections and performance: a study of firms listed on the BM&FBovespa. Journal of Contemporary Administration, 16(6), 806-826. https://doi.org/10.1590/S1415-65552012000600003