Political Connections and Leverage: Firm-level Evidence from Pakistan
Article first published online: 14 APR 2014
Copyright © 2014 John Wiley & Sons, Ltd.
Managerial and Decision Economics
Volume 36, Issue 6, pages 364–383, September 2015
How to Cite
2015) Political Connections and Leverage: Firm-level Evidence from Pakistan. Manage. Decis. Econ., 36: 364–383. doi: 10.1002/mde.2674., , and (
- Issue published online: 7 AUG 2015
- Article first published online: 14 APR 2014
- Manuscript Accepted: 12 MAR 2014
- Manuscript Revised: 8 MAR 2014
- Manuscript Received: 26 AUG 2013
This study investigates the impact of political connections on corporate financing decisions using a sample of listed Pakistani firms over the period 2002–2010. We find a positive and significant link between long-term debt and political connections, which reflects greater access to credit. Such preferential treatment escalates with the strength of the connected politician. Furthermore, positive effects of political connections are seen to be stronger for large firms and those affiliated with business groups. Copyright © 2014 John Wiley & Sons, Ltd.