Journal of Environmental Treatment Techniques
2020, Volume 8, Issue 4, Pages: xxx-xxx
invest a huge amount in such firms. In this way, they are
engaged to expand the profitability of firms. So, these shreds
of evidence prove that political links have a significant
impact on efficiency.
The influential leader refers to evaluating the
corporation's efficiency to determine the performance in the
market. Most firms use this efficiency to measure the
benefits, costs, and analysis of the different investment
projects. In these Asian countries, the company can decide
which project is more useful for further investment. In the
corporate world, for the nurturing of firms, there is a need to
because the managerial cost is high rather than benefits.
Some other factors like corruption, low morale of employees,
rent-seeking benefits, and overinvestment negatively
influences the firm's environmental performance .
Finally, all these evidence prove that political connections
have both positive and negative impact on corporate
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These are some plausible evidence that proves that cost
efficiency has a crucial role in promoting the entities.
Political links are potential benefits to improve the cost
efficiency of a corporation. Mostly, politically firms get more
market share and survive in a large market due to better
production. These firms are distinguishing based on their
cost-efficiency. In the competitive market, politically
connected firms are more pronounced due to their high
production level. They provide various edges of their
corporations, including the latest technology, skill
employees, effective strategy, and state resources. Political
aliens can make the law that low wage rate in all the
corporations. So, all this evidence proves that political
connections exert a positive impact on firm performance.
Efficiency can be measured based on the revenue of the
firms. It is the way to measure firm performance because it
indicates the suitable utilization of all resources and enhances
the profit. In the corporate world, numerous studies
frequently discussed the impact of efficiency on Asian
countries' performance. It has a vital role in the stability and
effectiveness of all the entities. There is a need for
motivation between managers and workers to increase the
production level. Most of the firms face the agency problem,
and it creates impediments to their growth. The political
connection is caused by the separation of ownership like
principle and agent. In companies, the principle-agent
problem creates organizational slack, and managers take a
decision for their own benefits, such as hire spare staff to do
their own work . To enhance efficiency, there is a need to
remove the conflict between managers and employees, and it
is vital to incentives for better results. Politically connected
firms exacerbate agency problems due to their influence,
which harms firms' efficiency.
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connections and the cost of equity capital. Journal of corporate
finance. 2012 Jun 1;18(3):541-59.
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from political extraction. The Journal of Law, Economics, &
Organization. 2013 Apr 1;29(2):332-54.
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connection, ownership, and financing constraints. Economics
Letters. 2012 May 1;115(2):164-7.
 Chaney PK, Faccio M, Parsley D. The quality of accounting
information in politically connected firms. Journal of accounting
and Economics. 2011 Feb 1;51(1-2):58-76.
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An examination of the relation between political expenditures,
environmental performance, and environmental disclosure.
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firm value: Do electoral promises or friendship connections
matter?. Journal of Public Economics. 2014 Jul 1;115:158-70.
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corporate governance on shareholder value. The journal of
finance. 2012 Oct;67(5):1943-77.
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buffer political ties in emerging markets:
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and firm performance: Comparative evidence from privately-
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Financial Analysis. 2014 Dec 1;36:153-67.
There are mixed evidence that proves that political
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earnings management: evidence from Chinese listed companies.
Corporate Governance: An International Review. 2007
associations have both positive and negative impact on firms'
performance and green finance. It is a challenging task to
arbitrate between the advantages and costs of these
connections. There are various consequences in prior studies
that prove that it positively impacts a firm's performance,
including tax exemptions, utilization of state resources and
power, and gain preferential access of leverage and
acquisition of the tremendous amount of market share .
To summarize, politically connected boards are known as
substantial elements for generating resources. In-depth
analysis, it is the speculative tool to boost the progress of
firms. These allies have the main role in nurturing the
corporations. Such sorts of peers do not face capital security
due to their links. These associations are prevalent for
Faccio M. Politically connected firms. American economic
review. 2006 Mar;96(1):369-86.
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corporate bailouts. The Journal of Finance. 2006
Fan JP, Wong TJ, Zhang T. Politically connected CEOs,
corporate governance, and Post-IPO performance of China's
newly partially privatized firms. Journal of financial economics.
007 May 1;84(2):330-57.
Fisman R. Estimating the value of political connections.
American economic review. 2001 Sep;91(4):1095-102.
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an environmentally sustainable business plan: An international
B2B case study. Corporate Social Responsibility and
Environmental Management. 2017 Jul;24(4):261-72.
On the other hand, some studies prohibit that political
connections harm the firms' environmental performance
Goldman E, Rocholl J, So J. Do politically connected boards