POLITICAL CONNECTIONS IN THE LARGEST COMPANIES LISTED ON BM&FBOVESPA

ABSTRACT

Political connections might be characterized as relations between companies and politicians, in which companies try to obtain advantages and politicians generally seek campaign funding. In this context, the present study aims at analyzing the relation between political connections from the largest companies listed on BM&FBovespa and their respective performances. Data from 132 companies have been assessed by means of descriptive statistics, average test and correspondence analysis. The political connection from each company was represented by the value of their donation to campaigns for the 2014 elections, and their performance was assessed by means of the Return on Equity (ROE). Results show that most of the funds donated to the campaign of 2014 was destined to the dispute for the presidency of the republic and the Partido dos Trabalhadores was the political party that received the most campaign donations from companies. JBS has donated over 65% of the total amount of funds provided by the companies in the sample. The state of Ceará was the state that received the most resources for candidatures in the 2014 elections. Amapá, Amazonas and Roraima were the only states where candidates did not receive funds for financing election campaigns from the investigated companies. The tests verified that there is no difference in performance when comparing companies with political connections to companies that do not have any political connections. It was found an association between high political connections and expressive company size.

Keywords:
Political connections; Performance; Campaign donations