Abstract
This paper highlights how debtholders value political connections. Specifically, it investigates whether lenders favor transactional connection as opposed to repeated relational connection. Tracing firms in a politically volatile emerging democracy, the
paper confirms that firms with transactional political connection strategy experience a relatively lower cost of debt than those with relational strategy. The results are more pronounced for firms with high risk of financial distress.
paper confirms that firms with transactional political connection strategy experience a relatively lower cost of debt than those with relational strategy. The results are more pronounced for firms with high risk of financial distress.
Original language | English |
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Number of pages | 43 |
Publication status | Published - 30 May 2018 |
Event | 41st Annual Congress of the European Accounting Association, EAA 2018 - Bocconi University, Milan, Italy Duration: 30 May 2018 → 1 Jun 2018 Conference number: 41 http://eaa2018.eaacongress.org/r/home |
Conference
Conference | 41st Annual Congress of the European Accounting Association, EAA 2018 |
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Abbreviated title | EAA |
Country/Territory | Italy |
City | Milan |
Period | 30/05/18 → 1/06/18 |
Internet address |
Keywords
- Corporate Governance
- Cost of debt
- Political connection