Family firms, firm performance and political connections: Evidence from Bangladesh

Abstract

We investigate the role of political connections in the performance of family firms. We do so in the setting of Bangladesh, an emerging economy in which family firms are dominant and a weak regulatory environment increases the payoffs from political connections. We find that family firms perform better than nonfamily firms. Moreover, politically connected family firms outperform family firms that are not politically connected. In contrast, nonfamily firms with political connections demonstrate lower firm performance than nonfamily firms without political connections.