POLITICAL CONNECTIONS, ACCOUNTING QUALITY AND LOAN CONTRACTING: EVIDENCE FROM THE DYNASTIC MONARCHY GOVERNMENT SYSTEM OF THE GCC MONARCHIES
This study examines the association between political connections, accounting quality and loan contracting in the Gulf Cooperation Council (GCC) monarchies. A key feature of the GCC government systems is the distinctive tie between ruling families and the states, forming the so-called dynastic monarchy government (DMG) system. An implication of the DMG system is that the power structure is expected to remain as defined by latest monarch over the period of his rulership, increasing political stability. This feature indicates greater predictability of future benefits or costs of political connections, a factor that may assist firms to reaching more informed corporate decisions. While most prior research has focused on an established or a developing democracy or on authoritarian regimes, few studies have analysed political connections using the DMG setting of the GCC monarchies. Thus, the DMG provides a unique setting to investigate the governance role of politically connected members and family owners and their impact on accounting quality and loan contracting.
استخدمت نظرية الوكالة (agency theory) في العديد من التخصصات منها المحاسبة، المالية، الاقتصاد، السلوك التنظيمي، والعلوم السياسية. وهذه النظرية موجهة لتحليل المشكلة المتصاعدة في العلاقة بين الموكل…
Purpose - An important question is whether lenders perceive politically connected firms as having less or higher default risk, and thus provide them with more or less preferential loan terms…
This study examines the association between political connections, accounting quality and loan contracting in the Gulf Cooperation Council (GCC) monarchies. A key feature of the GCC government…