Document Type

Thesis - Open Access

Award Date


Degree Name

Master of Science (MS)

Department / School


First Advisor

Nacasius Ujah


Emerging Markets, Firm Performance, Political Connectedness, Risk-taking


Existing literature exploring the effect of politically connected firms on their performance and risk-taking seems to offer decisive results for the emerging and the developed market. However, from professionals and anecdotal evidence, both markets do not exhibit similar characteristics. Considering these characteristics, instability of the government, lack thereof of adequate governance structure, I revisit the topic. This study comprises 27 advanced and 20 emerging economies for the years 1992 through 2016. I find that sound political environment drives risk-taking in advanced markets, while political connections drive corporate risk-taking in emerging markets. I also find that political institutions and political connections drive firm performance in advanced and emerging economies respectively. The results are robust controlling for country and year effect as well as through the propensity score matching technique, the 2007/2009 financial crisis and instrumental variable estimation technique.

Library of Congress Subject Headings

Corporations -- Political activity.
Corporations -- Finance.
Corporations -- Developing countries -- Finance.
Business enterprises.
Risk assessment.
Financial risk.



Number of Pages



South Dakota State University



Rights Statement

In Copyright