TY - JOUR
T1 - How do corporate political connections influence financial reporting? A synthesis of the literature
AU - Preuss, Susanne
AU - Königsgruber, Roland
PY - 2021/1
Y1 - 2021/1
N2 - 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.
AB - 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.
KW - Corporate political connections
KW - Literature review
KW - Financial reporting
UR - https://www.mendeley.com/catalogue/28f53fa5-46c1-3a8d-8dd2-45fe66873506/
U2 - 10.1016/j.jaccpubpol.2020.106802
DO - 10.1016/j.jaccpubpol.2020.106802
M3 - Article
VL - 40
SP - 106802
JO - Journal of Accounting and Public Policy
JF - Journal of Accounting and Public Policy
SN - 0278-4254
IS - 1
M1 - 106802
ER -