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In this study, we examine the relationship between political connections of private firms and the initial public offering process. Using registration statement information, we create a unique database of politically connected IPO firms. We find that political connections are substitutes to high-quality underwriters and big four auditors. Politically connected firms manage earnings more highly upward than non-connected firms prior to the public offering. Politically connected firms also exhibit less underpricing than non-connected firms. Finally, politically connected IPO firms have superior post-IPO returns relative to non-connected IPO firms.

Global leadership involves the ability to connect with individuals from different cultures. Connecting is an actionable process that creates mutual understanding, positive feeling, and a common approach to collaborate. Forming interpersonal connections can be an effective way for global leaders to cut across cultural differences as it is based on a universal human need for belonging. Our study aims to understand the specific actions global leaders engage in to connect with people across cultures. Furthermore, we examine how identity experiences of multicultural individuals contributed to their capabilities of connecting with people from different cultures in their role of global leader. Through a qualitative analysis of in-depth interviews with multicultural individuals in global leadership positions, we develop a model of connecting across cultures involving specific leadership actions that lead to emotive, cognitive, and behavioral dimensions for connection. Our model also illustrates how multicultural identity experiences equip global leaders with qualities such as empathy, perspective-taking, and integration, which enable them to engage in actions for connecting to people across cultures. The research in this chapter contributes to a better understanding of global leadership with novel insights into how global leaders connect to people and sheds light on the advantages of multicultural identity experiences in this process.

The connectivity provided by full-service network carriers under the umbrella of airline alliances is increasingly challenged by the services of Middle Eastern airlines via their own hubs, and the rise of new passenger strategies like self-connectivity. While these two developments can potentially benefit consumers with more services and lower fares, the rise of Middle East carriers has been met with opposition by EU and US airlines that call for increased protectionism. In addition, only a few airports in the world actively support self-connections. In this context, this study aims to investigate (1) the markets in which Middle East carriers exert a stronger dominance in terms of the number of passenger connections, (2) whether EU, US, or Asian hubs provide a competitive quality of connectivity in terms of travel time, and (3) whether a significant potential for self-connections is hidden at major airports worldwide. To that end, several datasets of passenger bookings (MIDT), airline schedules, and minimum connecting times between 2012 and 2015 are combined in a connections-building methodology that delivers six market-specific airport connectivity indicators for our benchmarking exercise. Our findings show that although European and some Asian hubs have lost traffic in global markets, they remain competitive from a quality perspective. US hubs have maintained their market share and competitive position. Finally, we identify the airports and airlines with the highest potential to provide self-connecting travel options, which can become an attractive new source of revenue for the parties involved.

This paper aims to contribute to the political connection literature by investigating the impact of political connection on banks’ profitability in Bahrain.

Exploiting the unique natural experiment of the 2017 Qatar blockade crisis, this study uses primary data of political connection. The study uses the difference-in-difference (DID) methodology to investigate the effect of political connections on banks’ profitability.

The main finding is that political connections have a positive effect on bank profitability in Bahrain. The paper finds that the ongoing GCC crisis has had a negative effect on the banking sector of Bahrain. During the Qatar blockade crisis, politically connected banks suffered more than their non-connected counterparts.

The result suggests that the Qatar blockade crisis has had a notable effect on the banking system throughout the region, including both the boycotting countries as well as Qatar. In the banking sector, politically connected banks are the most harmed by the crisis. Investors can enhance their hedging and investment decisions by exploiting knowledge of how political connections affected bank profitability during the Qatar diplomatic crisis and how that effect can be transmitted from one market to another. In addition, regulators could use insights about the association between political connections and profitability in Bahrain to undertake strategies to increase banks’ profitability and mitigate the transmission effect of a crisis by ensuring adequate regulation and supervision.

This paper offers four novel contributions to political connection literature as follows: Firstly, the study fills in an important gap in the literature as it is the first attempt to quantify the impact of political connections on bank performance in Bahrain. To the best of the authors’ knowledge, the role of political factors in Bahrain has not been studied about the banking system. Secondly, the study depends on primary data about political connections collected manually from various sources. Thirdly, this is the first study to investigate the effect of the Qatar blockade on the banking sector. Lastly, the evidence suggests that politically connected banks are more profitable than banks that lack political connections. However, the Qatar blockade crisis resulted in a sharp decrease in bank profitability, suggesting that the crisis significantly harmed the banking sector in Bahrain.

Online games are popular applications of Internet technology, with over 2.8 billion users worldwide. Many players engage in team gameplay, indicating that online games are suitable media through which players connect with their friends. However, past studies have not examined the ability of games to assist players in connecting with their friends, indicating a gap. To fill this gap, the authors propose a new concept, the friend-connecting affordance, which is the ability of an online game to enable players to contact friends within the game.

The authors built a model to explain how games' friend-connecting affordances influence game loyalty. The authors gathered responses from 1,347 online players and used structural equation modeling to test the model.

The authors found that friend-connecting affordances and team participation influence game loyalty. Gaming intensity and gaming history can moderate the impact of friend-connecting affordances.

This new affordance can be realized through various game elements, offering unique and actionable insights to game makers. The authors also compared the friend-connecting affordances among a number of popular online games, providing insights specific to each game and increasing the practical value of the findings.

The purpose of this paper is to explore how a politically connected firm moderates the relationship between media coverage and market value. More specifically, the authors are interested in the interplay of an external corporate governance (CG) mechanism with an internal one. By interacting different mechanisms, this paper advances the empirical setting of application and functions of the corporate governance.

This paper tests the hypotheses presented using panel data with a fixed-effect model, by assembling and exploiting a unique, hand-collected set of data on media coverage consisting of over 164,000 media reports and a politically connected board of directors comprising over 12,000 CVs tracked from 2010 to 2014. Data is originally from Brazil, a country where political connections are highly used by firms and that has been a place of much research on corporate political activity.

The results of this paper suggest that a politically connected board of directors can mitigate the negative effects of media coverage on market value. Overall, the results imply that the validity of a CG mechanism might be affected by other mechanisms.

The findings of this paper imply the need for research focusing on the mutual effects of different CG mechanisms. While CG is understood as a set of mechanisms, new research could focus on the interplay of these mechanisms.

The findings suggest that the presence of former politicians and government officers on the board dissipates bad news reported by the media and boosts market value when media is positive. To maximize investment returns, investors should analyze firms' political human capital.

To the best of the authors’ knowledge, this paper is the first to develop hypotheses on the moderation effects of a politically connected board on the relation between media coverage and market value. This is relevant because this brings insights on how firms could jointly manage these mechanisms.

The purpose of this study is to investigate the effects of capital market liberalization on audit reporting and pricing. The authors use the announcement of the Shanghai-Hong Kong Stock Connect program in China as a shock to capital market liberalization.

The authors use the difference-in-differences method to study the difference in changes in the frequency of modified audit opinions and audit fees between the treatment group and the control group.

This study finds that capital market liberalization increases reputational and litigation risks for auditors and leads to more conservative audit reports. In addition, capital market liberalization stimulates the management of eligible firms to improve the information environment, helps to reduce information asymmetry and decreases audit fees. Specifically, the authors identify the channels of active foreign institutional investors as a new governance mechanism through which capital market liberalization impacts eligible firm and auditor decisions.

This study complements the literature by showing that capital market liberalization may bring a new and strong governance mechanism for eligible firms and auditors.

This study may provide new references for active foreign institutional shareholders as a new and strong governance mechanism in weak institutional regimes such as China, auditors’ optimization decisions when litigation risks increase and management’s improvements in the information environment under the monitoring of foreign institutional shareholders.

Overall, this study contributes to the literature by showing that capital market liberalization can bring a new governance mechanism for the management of eligible firms and auditors in a weak institutional environment. Foreign institutional shareholders may be superior to the domestic market forces and other corporate governance in the role of monitoring the management of eligible firms and auditors.

This paper examines the influence of different types of political connections and political uncertainty on earnings credibility in Pakistan. Based on discernible differences, connected firms are grouped into civil connected and military connected firms.

The authors provide evidence concerning the earnings credibility incentives of groups of political connected firms and report that their incentives are significantly different. The findings remain robust to alternate methods of earnings credibility.

The findings evidence that civil (military) connected firms report less (more) credible earnings than the control group. High political uncertainty reduces the credibility of earnings. Results for the interaction of political connections and political uncertainty variables are not significant.

The paper investigates just one aspect of Pakistan's political economy, i.e. credibility of earnings; thus, it requires to be cautious on part of readers and policymakers. To reach a clearer conclusion, earnings credibility should be ex amined in the larger context, i.e. in conjunction with rent extractions, etc. A possible extension of the paper can be to investigate the channels of rent extractions used by the two types of connected firms.

The paper has contribution for policymakers as well as users of general purpose financial reports. The findings indicate that the users of general purpose financial reports should be more careful in the use of financial information during political uncertain periods and also of politically connected firms. Furthermore, policymakers should keep the larger context at the forefront while attempting to strengthen the enforcemnet regime.

This paper adds to extant political connections literature by identifying two types of politically connected firms and report that both groups have divergent financial reporting incentives. Furthermore, political uncertainty reduces the credibility of earnings.

The purpose of this paper is to examine the association between politically connected boards (both supervisory boards [SBs] and boards of directors [BODs]) and firm performance.

We focus on the political connections of SBs and BODs separately and estimate a quadratic model based on 1,099 Indonesian listed firm-year observations. Additionally, we address endogeneity problem by using sample selection model, generalized method of moments (GMM), propensity score matching\ and lagged variables regression.

We find that political connections of SBs are more significantly associated with firm performance than that of BODs. Furthermore, such an association is not monotonic, in that the relationship declines after a certain level of political connections. We also find that stand-alone firms with political connections perform better than firms belonging to family business groups. Our results are robust to alternative measures and to tests for endogeneity.

This study contributes to the literature by proposing non-linear model to incorporate the rent-seeking and resource dependence arguments. Although previous studies use regression analysis (linear model) and find mixed results on the association between political connections and firm performance, our non-linear model extends our understanding of the relationship between political connections and firm performance. We extend corporate governance literature by examining the role of political supervisory boards in the dual board system and the role of family business group in Indonesia. Several limitations are addressed to interpret all the findings. We use one period of the presidency (SBY-Susilo Bambang Yudhoyono) in Indonesia as our sample, but other regimes are not considered. We collect political connection and family business group information based on publicly data available. For politically connected firms, we do not have information whether they obtain connections through ruling parties or not.

Practitioners (such as companies and policymakers) can use our models to consider the level of political connections that can improve corporate’s performance. Additionally, they can use our findings to design corporate governance policies.

The paper identifies the use of the non-linear model on the association between political connections and firm performance in Indonesian dual board system.

The purpose of this paper is to examine whether the political connections of listed firms in China affect how the market reacts to cases of financial misrepresentation investigated by the regulatory authorities.

The authors use an event study method and the financial misrepresentation events in China stock markets as research setting and empirically test the association between market reactions to the announcement of financial misrepresentations and the presence of political connections.

The results show that on average, there is no significant market reaction to financial misrepresentation for politically connected firms. In contrast, however, there is a significantly negative market reaction for non-connected firms, which suggests that investors do not punish politically connected firms for financial misrepresentation. The authors argue that politically connected companies use the altered financial information to gain legitimacy and obtain benefits from the government. Consistent with the argument, the authors find that in the years after they disclose their financial misrepresentation, firms with political connections are more likely to increase their bank loans than firms without political connections.

The authors provide a new explanation for the low-earnings quality of politically connected firms.