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Political connections and the cost of equity capital

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dc.contributor.author Boubakri N.
dc.contributor.author Guedhami O.
dc.contributor.author Mishra D.
dc.contributor.author Saffar W.
dc.contributor.editor
dc.date 2012
dc.date.accessioned 2017-09-07T07:51:26Z
dc.date.available 2017-09-07T07:51:26Z
dc.date.issued 2012
dc.identifier 10.1016/j.jcorpfin.2012.02.005
dc.identifier.isbn
dc.identifier.issn 09291199
dc.identifier.uri http://hdl.handle.net/10938/12159
dc.description.abstract 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. © 2012 Elsevier B.V.
dc.format.extent
dc.format.extent Pages: (541-559)
dc.language English
dc.publisher AMSTERDAM
dc.relation.ispartof Publication Name: Journal of Corporate Finance; Publication Year: 2012; Volume: 18; no. 3; Pages: (541-559);
dc.relation.ispartofseries
dc.relation.uri
dc.source Scopus
dc.subject.other
dc.title Political connections and the cost of equity capital
dc.type Article
dc.contributor.affiliation Boubakri, N., American University of Sharjah, United Arab Emirates
dc.contributor.affiliation Guedhami, O., Moore School of Business, University of South Carolina, Columbia, SC 29208, United States
dc.contributor.affiliation Mishra, D., Edwards School of Business, University of Saskatchewan, Saskatoon, SK, S7N 5A7, Canada
dc.contributor.affiliation Saffar, W., Olayan School of Business, American University of Beirut, 1107 2020 Beirut, Lebanon
dc.contributor.authorAddress Boubakri, N.1705 College Street, Columbia, SC 29208, United States; email: nboubakri@aus.edu
dc.contributor.authorCorporate University: American University of Beirut; Faculty: Suliman S. Olayan School of Business; Department: School of Business;
dc.contributor.authorDepartment School of Business
dc.contributor.authorDivision
dc.contributor.authorEmail nboubakri@aus.edu; omrane.guedhami@moore.sc.edu; mishra@edwards.usask.ca; walid.saffar@aub.edu.lb
dc.contributor.authorFaculty Suliman S. Olayan School of Business
dc.contributor.authorInitials Boubakri, N
dc.contributor.authorInitials Guedhami, O
dc.contributor.authorInitials Mishra, D
dc.contributor.authorInitials Saffar, W
dc.contributor.authorOrcidID
dc.contributor.authorReprintAddress Guedhami, O (reprint author), 1705 Coll St, Columbia, SC 29208 USA.
dc.contributor.authorResearcherID
dc.contributor.authorUniversity American University of Beirut
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dc.description.citedCount 8
dc.description.citedTotWOSCount 10
dc.description.citedWOSCount 10
dc.format.extentCount 19
dc.identifier.articleNo
dc.identifier.coden
dc.identifier.pubmedID
dc.identifier.scopusID 84858432044
dc.identifier.url
dc.publisher.address PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS
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dc.relation.ispartofConferenceCode
dc.relation.ispartofConferenceDate
dc.relation.ispartofConferenceHosting
dc.relation.ispartofConferenceLoc
dc.relation.ispartofConferenceSponsor
dc.relation.ispartofConferenceTitle
dc.relation.ispartofFundingAgency
dc.relation.ispartOfISOAbbr J. Corp. Financ.
dc.relation.ispartOfIssue 3
dc.relation.ispartOfPart
dc.relation.ispartofPubTitle Journal of Corporate Finance
dc.relation.ispartofPubTitleAbbr J. Corp. Financ.
dc.relation.ispartOfSpecialIssue
dc.relation.ispartOfSuppl
dc.relation.ispartOfVolume 18
dc.source.ID WOS:000303692900007
dc.type.publication Journal
dc.subject.otherAuthKeyword Corporate governance
dc.subject.otherAuthKeyword Cost of capital
dc.subject.otherAuthKeyword Political connections
dc.subject.otherChemCAS
dc.subject.otherIndex
dc.subject.otherKeywordPlus ECONOMETRIC EVALUATION ESTIMATOR
dc.subject.otherKeywordPlus PRIVATIZED FIRMS
dc.subject.otherKeywordPlus STOCK RETURNS
dc.subject.otherKeywordPlus IMPLIED COST
dc.subject.otherKeywordPlus CROSS-SECTION
dc.subject.otherKeywordPlus DISCLOSURE
dc.subject.otherKeywordPlus RISK
dc.subject.otherKeywordPlus INFORMATION
dc.subject.otherKeywordPlus OWNERSHIP
dc.subject.otherKeywordPlus BENEFITS
dc.subject.otherWOS Business, Finance


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