Uncovering the Heterogeneity of Politically Connected Firms in Malaysia: A Novel Methodology

This study presents an innovative methodology for assessing the heterogeneity of politically connected firms in Malaysia, especially in the context of significant political changes following the 2018 general election (GE14).While political connections in Malaysia have historically influenced corporate strategies and performance, previous categorization and analysis have often been inconsistent.Building on Wong & Hooy's (2018) framework, this study updates the classification of political connections through Government, Director, Family, and Crony, reflecting the shifts in Malaysia's political landscape post-2018.By analysing firm-level data from 2014 to 2021, this study examines how different types of political connections impact corporate behavior across various political regimes.The findings offer new insights into the effects of these connections on corporate strategies and financial outcomes, highlighting the necessity for accurate categorization in political business research.This updated methodology addresses gaps in the existing literature and provides a framework for future studies in emerging markets.