The Synergistic Financial Effect of Corporate Political Activities: The Case of Listed Canadian Companies
- Saidatou Dicko
Abstract
Corporate political activities can bring genuine political capital to firms and are an effective way to access key resources to boost financial capital and maximize profits. These activities fall into three categories: coopting ex-politicians to decision-making bodies (board of directors and top management) to benefit from their social capital; lobbying to directly influence public policy; and making financial contributions to the activities of political parties and committees. This study asks the following question: what is the combined effect of two of these activities (political connections and lobbying) on the financial and accounting indicators of Canadian listed companies? We argue that engaging in corporate political activities allows firms to accumulate a type of political capital that we define as the sum of all political activities conducted by an individual company. To perform our research, we analyzed Canadian companies listed on the S&P/TSX composite index from 2012 through 2016. Results show that firms with this type of political capital are generally in a better financial position than those without it. A significant correlation was found between a firm’s political capital and its main sources of financing (equity and long-term debt) as well as with its ROE. Political capital has more positive impacts on key firm financial indicators than does each type of political activity on its own (synergistic effect).
- Full Text: PDF
- DOI:10.5539/ibr.v14n1p102
Journal Metrics
h-index (January 2024): 102
i10-index (January 2024): 947
h5-index (January 2024): N/A
h5-median(January 2024): N/A
( The data was calculated based on Google Scholar Citations. Click Here to Learn More. )
Index
- Academic Journals Database
- ACNP
- ANVUR (Italian National Agency for the Evaluation of Universities and Research Institutes)
- CNKI Scholar
- COPAC
- CrossRef
- EBSCOhost
- EconBiz
- ECONIS
- EconPapers
- Elektronische Zeitschriftenbibliothek (EZB)
- EuroPub Database
- Excellence in Research for Australia (ERA)
- Genamics JournalSeek
- Google Scholar
- Harvard Library
- IBZ Online
- IDEAS
- Infotrieve
- Kobson
- LOCKSS
- Mendeley
- MIAR
- Norwegian Centre for Research Data (NSD)
- PKP Open Archives Harvester
- Publons
- Qualis/CAPES
- RePEc
- ResearchGate
- ROAD
- Scilit
- SHERPA/RoMEO
- SocioRePEc
- Technische Informationsbibliothek (TIB)
- The Keepers Registry
- UCR Library
- Universe Digital Library
- ZBW-German National Library of Economics
- Zeitschriften Daten Bank (ZDB)
Contact
- Kevin DuranEditorial Assistant
- ibr@ccsenet.org