Transfers of managers and board members to politics: impact on firm access to debt

Abstract

The main goal of this study is to examine how Transfers of Managers and Board members to Politics (TMBPs) impact firms’ access to financing. Using a new dataset covering Central European economies during the 2014–2019 period and random–effects static panel models, we find that TMBPs worsen access to financing for concerned firms, which suggests that TMBPs constitute a loss of valuable social ties for firms and that TMBPs do not create a new form of political connections through past social networks. Moreover, according to our results, the latter seems to be shortlived.