Demystifying the dark side of board political capital

T.Y. Leung; Piyush Sharma

doi:10.1016/j.jbusres.2021.01.002

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Demystifying the dark side of board political capital

Journal article

Peer reviewed

Demystifying the dark side of board political capital

T.Y. Leung and Piyush Sharma

Journal of Business Research, Vol.126, pp.307-318

2021

DOI: https://doi.org/10.1016/j.jbusres.2021.01.002

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Abstract

Board political capital

Gender diversity

Perk consumption

Regulatory enforcement

Politically-connected directors help firms build ‘board political capital’ that may give them preferential access to benefits but it could also make them indulge in corrupt activities that in turn could lead to regulatory enforcement by authorities. However, it is still not clear which attributes of board political capital may expose firms to such negative outcomes. We address this gap by using an overarching dark side perspective of board political capital to hypothesize that regional (vs. central) board political capital, proportion of male (vs. female) politically-connected directors and perk consumption have positive effects on the incidence of regulatory enforcement. We also hypothesize that proximity to the regulatory authorities has a negative effect on regulatory enforcement and it negatively moderates the link between board political capital and regulatory enforcement. Data on 762 pairs of listed Chinese firms supports most of the hypotheses. We discuss the theoretical and managerial implications of these results.

Details

Title: Demystifying the dark side of board political capital
Authors: T.Y. Leung (Corresponding Author) - Open University of Hong Kong
Piyush Sharma (Author) - Curtin University
Publication details: Journal of Business Research, Vol.126, pp.307-318
Publisher: Elsevier Inc
DOI: 10.1016/j.jbusres.2021.01.002
ISSN: 1873-7978
Organisation Unit: School of Business and Creative Industries
Language: English
Record Identifier: 99708571002621
Output Type: Journal article

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Web Of Science research areas: Business

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