CEO’s Political Connection and Organization Efficiency: Evidence from Public Institutions in Korea

Hyejeong Shin, Ji Young Ahn

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

This paper investigates whether political connection of Chief Executive Officer (CEO) in public institutions is associated with organization efficiency. We utilize two types of public institutions in Korea, state-owned enterprises (SOEs) and quasi-governmental organizations (QUANGOs). Using the Data Envelopment Analysis (DEA), we find that CEOs with political connection are positively related to organization efficiency. Specifically, such association is largely driven by QUANGOs whose revenue resource is fully funded and owned by the government. It implies that politically connected CEOs can improve firm efficiency when the organizations are financially dependent on the government and are under its stringent monitoring by government.

Original languageEnglish
Pages (from-to)419-435
Number of pages17
JournalPublic Organization Review
Volume21
Issue number3
DOIs
StatePublished - Sep 2021

Keywords

  • Organizational efficiency
  • Political connections
  • Public institutions
  • South Korea
  • State owned enterprises (SOEs)

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