Political connections and financial constraints : evidence from transition countries / Maurizio Bussolo, Francesca de Nicola, Ugo Panizza, Richard Varghese
Contributor(s): Resource type: Ressourcentyp: Buch (Online)Book (Online)Language: English Series: World Bank E-Library Archive | Policy research working paper ; 8956Publisher: Washington, DC, USA : World Bank Group, Europe and Central Asia Region, Office of the Chief Economist, August 2019Description: 1 Online-Ressource (circa 32 Seiten) : IllustrationenSubject(s): Genre/Form: Additional physical formats: Erscheint auch als: Political Connections and Financial Constraints: Evidence from Transition Countries. Druck-Ausgabe Washington, D.C : The World Bank, 2019DOI: DOI: 10.1596/1813-9450-8956Online resources: Summary: This paper examines whether political connections ease financial constraints faced by firms. Using firm-level data from six Central and Eastern European economies, the paper shows that politically connected firms: (i) have high levels of leverage, (ii) have low levels of profitability, (iii) are less capitalized, (iv) have low marginal productivity of capital, and (v) do not invest more than unconnected firms. Next, the paper shows that connected firms borrow more because they have easier access to credit and that political connections lead to a misallocation of capital. The results are consistent with the idea that political connections distort capital allocation and may have welfare costsPPN: PPN: 1680056166Package identifier: Produktsigel: ZDB-110-WBL | ZDB-1-WBA | ZDB-110-WBONo physical items for this record
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