scholarly journals The Ownership Structure of Corporations: Political Connections from the Resource Dependence Perspective – A Theorical Essay

2011 ◽  
Vol 10 (3) ◽  
pp. 126-146
Author(s):  
Nathanael Kusch Brey ◽  
Silvio Parodi Oliveira Camilo ◽  
Rosilene Marcon ◽  
Anete Alberton
Keyword(s):  
Ownership Structure ◽  
Resource Dependence ◽  
Political Connections ◽  
Private Companies ◽  
Political Interference ◽  
The Government ◽  
Resource Dependence Perspective ◽  
A Company

After the 90s, which heralded the era of privatization in Brazil, the government became a shareholder in various private companies. Government participation can interfere in the objectives, strategies and ultimately in the performance and survival of corporations. This paper aims to discuss this phenomenon and the importance of political connections in terms of ownership structure for an organization's survival. The objectives of governments as owners tend to conflict with those of other shareholders, because their goals tend to have more of a social and political element, which can lead to organizational deficiency in the performance of the company. One may come to believe that when a company has the government as a shareholder, its survival is ensured, as suggested by the theory of resource dependence, but this participation may in fact negatively affect the company's performance due to government objectives. This work proposes a way to mitigate the problem while ensuring the benefits of this connection with the government by reducing the stake of government in companies to minimum levels, which would reduce the risk of political interference.

How Do Politicians Capture a State? Evidence from State-Owned Enterprises

2020 ◽  
pp. 088832542095348
Author(s):  
Katarzyna Szarzec ◽  
Bartosz Totleben ◽  
Dawid Piątek
Keyword(s):  
Corporate Governance ◽  
Interest Group ◽  
Ownership Structure ◽  
Supervisory Board ◽  
Board Members ◽  
Private Companies ◽  
Government Administration ◽  
State Capture ◽  
Supervisory Boards ◽  
The Government

This article discusses political state capture in the context of party patronage. Evidence of this is delivered from state-owned enterprises (SOEs) and the rotations of members of their management and supervisory boards. In this case, it is deemed that an interest group, which consists of politicians and representatives in the government administration, decides about the appointment and dismissal of board members through the corporate governance of SOEs and ownership policy of the state. We analyzed the scale and intensity of rotations in Poland of about twelve thousand joint-stock companies in the years 2001–2017 according to their ownership structure. We show that changes of managers and supervisory board members in state-owned enterprises are higher than in private companies and are related to political elections. We estimated that on average three months after a new government is formed, a peak of changes in the composition of boards is observed, though they are earlier in the case of a supervisory board. We conclude that this can be regarded as an example of state capture by politicians.

scholarly journals The Role of Political Connections and Family Ownership in Increasing Firm Value

2021 ◽  
Vol 10 (1) ◽  
pp. 40-53
Author(s):  
Momon ◽  
Lela Nurlaela Wati ◽  
Sutar
Keyword(s):  
Empirical Evidence ◽  
Ownership Structure ◽  
Firm Value ◽  
Business Environment ◽  
Political Connections ◽  
Family Ownership ◽  
Governance Mechanism ◽  
Manufacturing Companies ◽  
The Family ◽  
A Company

In the face of business competition, a company strategy is needed by seeking and exploiting opportunities in the business environment, one of which is through political connections. Ownership structure plays an essential role in the company to determine the firm performance. The high concentration of family ownership has the power to reduce agency conflicts between management and stakeholders in a company. Concentrated ownership can serve as corporate governance mechanism for better and effective monitoring of management. This study was conducted to determine empirical evidence of the effect of political connections and family ownership structure on firm value. The sample in this study was 390 data of the manufacturing company. The data analysis used is moderating regression analysis. The results of this study are a positive influence of political connections and family ownership structure on firm value. The results showed that the more the company had a strong political connection and was controlled by the family, the more the firm value would increase. The interaction of political connections can strengthen the influence of family ownership on firm value. It proves that the family ownership structure plays a role in determining political connections in Indonesia, especially in manufacturing companies. The existence of empirical evidence that shows that the firm value controlled by a politically connected family is higher than companies that are not connected politically, which implies investors to invest in companies that are politically connected and companies controlled by families with majority ownership because it is proven to increase firm value.

TAX AVOIDANCE, PRIVATE COMPANIES AND THE FAMILY

2013 ◽  
Vol 72 (1) ◽  
pp. 35-49 ◽  
Author(s):  
Glen Loutzenhiser
Keyword(s):  
Family Income ◽  
Tax Avoidance ◽  
Private Companies ◽  
Personal Services ◽  
The Family ◽  
Media Reports ◽  
The Government ◽  
Legal Forms ◽  
A Company ◽  
Insurance Contribution

AbstractRecent media reports have revealed a substantial number of highly-paid senior civil servants and BBC presenters have been using “off payroll” arrangements and personal services companies to reduce the tax paid on their earnings. This article examines the tax and National Insurance contribution (NIC) savings that can be had by carrying on economic activity through a company rather than as an unincorporated business or an employee. These savings derive from a combination of favourable tax and NIC rates on companies, and can be further increased through family income-splitting arrangements, as witnessed in the case of Jones v Garnett. Several possible reforms to address the distortions and inequity in the present tax and NIC regimes in favour of companies are considered, including amendments to the IR35 “disguised employment” regime and the anti-income-splitting rules known as the settlement provisions. Applying the new statutory general anti-abuse rule, which the Government plans to introduce in Finance Act 2013, is another possible approach. The preferred option, however, is to deal with the root problem and pursue closer alignment of the tax and NIC treatment of activity carried on in different legal forms.

Russia in 2000-2004: Heading towards State Capitalism?

2004 ◽  
pp. 42-65 ◽  
Author(s):  
A. Radygin
Keyword(s):  
The State ◽  
Private Business ◽  
Private Companies ◽  
State Capitalism ◽  
The Government

The paper deals with one of the characteristic trends of the 2000s, that is, the government's property expansion. It is accompanied by attempts to consolidate economic structures controlled by the state and state-owned stock packages and unitary enterprises under the aegis of holdings. Besides the government practices selective severe enforcement actions against a number of the largest private companies, strengthens its control over companies with mixed capital and establishes certain informal procedures of relationships between private business and the state. The author examines the YUKOS case and the business community's actual capacity to protect its interests. One can argue that in all likelihood the trend to the 'state capitalism' in its specific Russian variant has become clearer over 2003-2004.

scholarly journals Kuzbass Development Strategy: Past Lessons and Future Wrongs

2020 ◽  
Vol 174 ◽  
pp. 04038
Author(s):  
Yuri Fridman ◽  
Galina Rechko ◽  
Ekaterina Loginova
Keyword(s):  
Strategic Planning ◽  
Development Strategy ◽  
Living Standards ◽  
The Political ◽  
Business And Society ◽  
Private Companies ◽  
Standards Of Living ◽  
Economic Reality ◽  
The Government

The article discusses the place and role of strategic planning in ensuring that Kemerovo Oblast – Kuzbass develops comprehensively. For over thirty years, we have been studying the region with one of the leading national territorial-production centers established in the 20th century, how it emerged and functioned. Studies suggest that without regard to the economies of Russia as a whole and Kuzbass’s neighboring regions in particular, its issues cannot be satisfactorily resolved. At large, when strategic planning followed this assumption, it contributed to how fast and holistically the territory developed. Considering that, in the 21st century, strategy makers diverged from this concept and started to search for new approaches, the region’s economy has slowed down and its living standards have declined sharply. The momentum can be reversed with an active state socio-economic policy. Its previous forms, however, when the state gave preferences to private companies and did not require corresponding growth in standards of living in return, became unacceptable. It is necessary to work out a system of effective solutions and measures with mechanisms for reconciling the interests of the government, business and society within approaches that are adequate to the political and economic reality of today’s world.

scholarly journals The politics of bailouts: Estimating the causal effects of political connections on corporate bailouts during the 2008–2009 US financial crisis

Public Choice ◽  
2021 ◽  
Author(s):  
Vuk Vukovic
Keyword(s):  
Financial Crisis ◽  
Financial Services ◽  
The United States ◽  
Political Campaigns ◽  
Political Connections ◽  
Troubled Asset Relief Program ◽  
Top Executives ◽  
The Government ◽  
The Right ◽  
Relief Program

AbstractIn 2008, as the financial crisis unfolded in the United States, the banking industry elevated its lobbying and campaign spending activities. By the end of 2008, and during 2009, the biggest political spenders, on average, received the largest bailout packages. Is that relationship causal? In this paper, I examine the effect of political connections on the allocation of funds from the Troubled Asset Relief Program (TARP) to the US financial services industry during the 2008–2009 financial crisis. I find that TARP recipients that lobbied the government, donated to political campaigns, or whose top executives had direct connections to politics received better bailout deals. I estimate regression discontinuity design and instrumental variable models to uncover how election outcomes for politicians in close races affected the distribution of bailout funds for connected firms. The results do not imply that some banks were deliberately favored over others, just that favored banks benefited because of their proximity to the right people in power. If being politically connected matters in general, in times of crisis it matters even more.

scholarly journals Radio Spectrum Management and RFI in the United States

1991 ◽  
Vol 112 ◽  
pp. 174-175
Author(s):  
R. Marcus Price
Keyword(s):  
United States ◽  
Department Of Defense ◽  
Government Regulation ◽  
The United States ◽  
Radio Spectrum ◽  
Spectrum Management ◽  
Federal Communications Commission ◽  
Private Companies ◽  
The Government ◽  
Government Body

ABSTRACTIn the United States, civil common carrier telecommunications are provided by private companies, not by any agency of the government. Regulation of these services and spectrum management oversight is provided by the Federal Communications Commission (FCC), an agency of the government. Government telecommunications are operated by individual agencies, e.g. the Department of Defense, under the overall regulation of the Office of Spectrum Management of the National Telecommunications and Information Administration (NTIA), a government body separate from the FCC. In bands shared by the civil and government sectors, liaison and coordination is effected between the FCC and the NTIA.

Wining and Dining Government Officials: What Drives Political Networking in Chinese Private Ventures?

2020 ◽  
Vol 16 (5) ◽  
pp. 1084-1113
Author(s):  
Jianjun Zhang ◽  
Pei Sun ◽  
Kunyuan Qiao
Keyword(s):  
Emerging Economies ◽  
Resource Dependence ◽  
Institutional Environment ◽  
Resource Dependence Theory ◽  
Political Activity ◽  
Corporate Political Activity ◽  
Dyadic Relationship ◽  
Political Actors ◽  
Government Relations ◽  
The Government

ABSTRACTManagerial networking with political actors has long been recognized as a crucial co-option strategy to navigate the challenging institutional environment in emerging economies. However, we know much less about what drives the variation of political networking investment by private ventures. Drawing on resource dependence theory, we unpack the dyadic business-government relations and identify the key organizational and environmental factors that shape the power dependence relationships between private ventures and the government. By examining power imbalance and mutual dependence in this dyadic relationship and considering both the necessity and the capability of political networking, we develop hypotheses regarding the ways in which size-, connection-, and location-based dependencies affect firms’ political networking intensity. These hypotheses are tested through a unique survey of Chinese private ventures. Our study finds that political networking intensity (1) has an inverted U-shaped relationship with firm size, (2) is negatively associated with the presence of embedded political ties while positively associated with that of achieved political connections, and (3) is smaller when the focal firm is located in business development zones. This research bears rich implications for our understanding of corporate political activity in emerging economies from a resource dependence lens.

Accountability and the Media

2014 ◽  
Vol 652 (1) ◽  
pp. 206-221
Author(s):  
Anton Harber
Keyword(s):  
South African ◽  
News Media ◽  
Media Access ◽  
Political Interference ◽  
The Face ◽  
Public Broadcaster ◽  
The Media ◽  
The Government ◽  
The Cost ◽  
Poor Management

Two decades of contestation over the nature and extent of transformation in the South African news media have left a sector different in substantive ways from the apartheid inheritance but still patchy in its capacity to fill the democratic ideal. Change came fast to a newly open broadcasting sector, but has faltered in recent years, particularly in a public broadcaster troubled by political interference and poor management. The potential of online media to provide much greater media access has been hindered by the cost of bandwidth. Community media has grown but struggled to survive financially. Print media has been aggressive in investigative exposé, but financial cutbacks have damaged routine daily coverage. In the face of this, the government has turned its attention to the print sector, demanding greater—but vaguely defined—transformation and threatened legislation. This has met strong resistance.

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