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Title: The value of political connections in the UK
Author: Orujov, Ayan
ISNI:       0000 0004 5919 9173
Awarding Body: University of Bristol
Current Institution: University of Bristol
Date of Award: 2016
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This thesis assesses the importance of different types of political connections for both British companies and individual directors sitting on the boards of these companies. Overall our findings suggest that directors' educational ties to politicians are important for companies, but directors that bring in these connections are not compensated differently compared with other directors in the same company. Chapter 2, provides evidence that political connections formed via a shared educational backgrounds between company directors and politicians are valuable for UK companies. Firms connected to the Conservative party tend to increase in value significantly more than those connected to the Labour party in response to an increase in the Conservatives' lead in the opinion polls in the run-up to the 2010 UK( General Election. Connections to both houses of the UK Parliament are valuable. Political connections are more valuable when they involve a powerful director, a powerful politician or are based on a stronger social tie. In the third chapter, we examine whether there is a link between political connections, assumed to be established via directors' individual political donations, and company value. We also use more commonly used measures of politically connected boards and corporate donations. We do not find any of these potential forms of political connectedness to be associated with changes in company value. Using data on political connections from chapters 2 and 3, in the fourth chapter we test the impact on director pay of education ties between directors and parliamentarians (MPs and Lords); directors' individual political donations; and directors' past (or current) parliamentary positions. Initial results suggest that education ties between directors and parliamentarians are associated with higher director compensation, but once we control for firm fixed effects this is no longer the case, implying that the higher compensation can be explained by unobservable firm characteristics.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available