Title: Political connections: evidence from listed companies in Portugal

Authors: Maria Teresa Bianchi; Rui Couto Viana

Addresses: Faculty of Economics, University of Porto, Rua Roberto Frias, 4200-464 Porto, Portugal ' Faculty of Economics, University of Porto, Rua Roberto Frias, 4200-464 Porto, Portugal

Abstract: This paper reports the results of an exploratory analysis, focused on Euronext Lisbon listed companies, which aimed to obtain an image of the characteristics of politically connected firms and of the politicians connected to them. Our results show that the majority of listed companies are politically connected and politicians, in some cases, are involved with several companies. The size of connected firms is significantly higher than of their non-connected peers. However, measures of financial equity to assets, return on assets and effective tax rate on income not seem to be significantly different in the two observed groups. Concerning to the politicians serving on the board of directors and supervisory board, this paper shows that the majority is or was a minister, all of them have an academic degree and are male genre, and the main area of their degrees is law followed by economics.

Keywords: political connections; Euronext Lisbon; politicians; board of directors; Portugal; financial equity; return on assets; tax rate; income tax; business connections.

DOI: 10.1504/IJEA.2014.060917

International Journal of Economics and Accounting, 2014 Vol.5 No.1, pp.75 - 95

Published online: 07 May 2014 *

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