TY  - RPRT
        AU  - Domadenik, Polona
AU  - Prašnikar, Janez
AU  - Svejnar, Jan
        TI  - Legal Corruption, Politically Connected Corporate Governance and Firm Performance
        PY  - 2014/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8321
        UR  - https://www.iza.org/publications/dp8321
        AB  - In this paper we present and test a theory of how political corruption, found in many transition and emerging market economies, affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. We test this prediction on an almost complete population of Slovenian joint stock companies with 100 or more employees. Using the supervisory board structure, together with balance sheet and income statement data for 2000-2010, we show that a higher share of politically connected supervisory board members leads to lower productivity.
        KW  - politicians
KW  - productivity
KW  - corporate governance
KW  - corruption
KW  - state owned enterprises
        ER  -