Political influence on economic decision-making in government-owned companies: From the perspectives of key players

Abstract

This study assessed the perspectives of key players on political influence in government-owned companies. The purpose was to provide in-depth or detailed understanding of political influence in such companies and how political influence affects company economic decision-making. Data was collected via face-to-face interviews based on open ended questions. A total sample of twenty-four top management personnel of listed and non-listed government-owned companiesparticipated in the interviews. The findings provided considerable insights into the actual relationship between governments, politicians/ board of directors and managers in government-owned companies. The findings revealed a difference between the level of political influence in federal government-owned companies and the state government-owned companies. State government owners appeared to have greater direct involvement in their companies compared to federally-owned companies which are more likely to have an arms’ length relationship with the shareholding government. The findings also showed the effects of political influence on decisions connected to corporate governance, accounting and reporting. Key words: Political influence, government-owned companies, politics in business.