Abstract
A large stream of research has analyzed the effects of corporate political connections (CPCs) on firms, including first evidence on their effects on financial reporting behavior. However, the evidence so far is inconclusive, and attempts to explain the causality of effects on reporting are limited. In this article, we present the results of a systematic review of the literature on CPCs. We draw on findings in the accounting, finance, and economics literature and derive a framework that identifies four channels through which CPCs affect financial reporting. Our review of the literature suggests that effects of political connections tend to be more ambiguous than suggested by individual studies that often offer directional hypotheses. We also identify eight distinct types of political connectedness and discuss their interrelations and the proxies used in the literature to measure them.
Original language | English |
---|---|
Article number | 106802 |
Pages (from-to) | 106802 |
Journal | Journal of Accounting and Public Policy |
Volume | 40 |
Issue number | 1 |
DOIs | |
Publication status | Published - Jan 2021 |
Funding
Helpful comments by Kees Camfferman, Henri Dekker, Elisavet Mantzari, Christoph Pelger, Jacco Wielhouwer, as well as participants at the 15th Annual EURAM Conference in Warsaw 2015, the EAA Annual Congress in Paphos 2019, the 6th Workshop on the Politics of Accounting in Manchester 2019, and seminar presentations at the University of Durham, NHH Bergen and the Vrije Universiteit Amsterdam are gratefully acknowledged.
Funders | Funder number |
---|---|
Durham University |
Keywords
- Corporate political connections
- Literature review
- Financial reporting