Publication Type

Master Thesis

Publication Date



The economic effects of firm’s political ties have attracted increasing scholarly attention in recent years. Different from prior research, this paper investigate the impact of political ties on firm performance for the lens of politically connected directors (PCD) clustering, which is a pervasive phenomenon in emerging economies but is ignored by academic researchers. This phenomenon enables us to build up a unified theoretical framework that considers the asset effect and liability effect of political ties at the same time. We hypothesize and find that there is a curvilinear relationship between firm performance and PCD clustering. Additionally, we find that there are many factors that affect PCD clustering. For instance, PCD clustering may reflect firms’ historical burden, the industry needs, the bargaining power of the largest shareholders, as well as CEOs’ preference.


PCD clustering, board of directors, political ties, firm performance

Degree Awarded

MSc in Management


Business Administration, Management, and Operations


Tan, Wee Liang

Copyright Owner and License

Wang Yanan Institute for Studies in Economics (WISE), Xiamen University, Xiamen, China 361005