Military Connections, Investment Efficiency and Political Uncertainty: Evidence from Pakistan

This study examined the impact of military connections on a firm's investment efficiency in Pakistan during the period from 2011 to 2019. Fixed effect regression results revealed that military connections exert a positive and significant effect on the firm's investment efficiency, supporting the resource dependence theory's prediction. This result remains robust when using alternative measurements of investment efficiency, considering periods of political uncertainty proxied by election years, and controlling for endogeneity issues related to the military connection variable. However, a breakdown of military connections revealed that the presence of a military-connected Chairman reduces firms' investment efficiency. Our paper contributes to the growing attention on the impact of military-connected key individuals on corporate decision-making.

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Publication Details

Journal
Asian Academy of Management Journal of Accounting and Finance
Published
2024-12-27
DOI
https://doi.org/10.21315/aamjaf2024.20.2.5
Citations
2
Primary Topic
Defense, Military, and Policy Studies
Type
article
Field-Weighted Citation Impact
2.26
Controls
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article

Military Connections, Investment Efficiency and Political Uncertainty: Evidence from Pakistan

Mohd Yushairi bin Mat Yusoff, Muhammad Saif ul Islam, Woei Chyuan Wong
2 citations
Asian Academy of Management Journal of Accounting and Finance
Defense, Military, and Policy Studies
2.26
article

Military Connections, Investment Efficiency and Political Uncertainty: Evidence from Pakistan

Mohd Yushairi bin Mat Yusoff, Muhammad Saif ul Islam, Woei Chyuan Wong
article en
2 citations

Abstract

This study examined the impact of military connections on a firm's investment efficiency in Pakistan during the period from 2011 to 2019. Fixed effect regression results revealed that military connections exert a positive and significant effect on the firm's investment efficiency, supporting the resource dependence theory's prediction. This result remains robust when using alternative measurements of investment efficiency, considering periods of political uncertainty proxied by election years, and controlling for endogeneity issues related to the military connection variable. However, a breakdown of military connections revealed that the presence of a military-connected Chairman reduces firms' investment efficiency. Our paper contributes to the growing attention on the impact of military-connected key individuals on corporate decision-making.

Asian Academy of Management Journal of Accounting and FinanceVol. 20(2)
Minhaj University Lahore (PK), Northern University of Malaysia (MY)
Decent work and economic growth
Openalex Percentile: Top 7%
Defense, Military, and Policy Studies
2.26
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Military Connections, Investment Efficiency and Political Uncertainty: Evidence from Pakistan — Mohd Yushairi bin Mat Yusoff, Muhammad Saif ul Islam, et al. · Asian Academy of Management Journal of Accounting and Finance (2024) | TGRS Research Map | TGRS