Valuing Corporate Governance in Politically Connected Firms: A Study of Thailand.
Abstract: Thailand underwent intensive corporate governance reforms following
the Asian financial crisis making it a good setting to test the joint effects of corporate
governance and political connections on firm value. Using data from listed firms in
Thailand from 2001 to 2006, this dissertation finds that political connections add value to
connected firms, as reflected in their traded share ... read moreprices. Moreover, political connections
and corporate governance tend to be complementary. That is, rather than subtract value from
firms through the greater transparency that might conflict with the process of political
connection value extraction, better corporate governance adds value to minority
shareholders as it might re-distribute benefits away from majority shareholders'
expropriation and into minority shareholders' hands. This dissertation also finds that the
nature of cash flows from political connections and good corporate governance are
different; cash flows from political connections are much larger and more tangible than
cash flows from better corporate governance which are usually intangible and not
immediately measurable, rendering disproportionate values between the two. In addition,
industry effects also play an important role in political concentration, political
connection value, and complementarity between political connections and corporate
Thesis (Ph.D.)--Tufts University, 2014.
Submitted to the Dept. of Economics and International Business.
Advisor: Laurent Jacque.
Committee: Patrick Schena, and Jonathan Brookfield.
Keyword: Finance.read less