Political connections and operational performance of non-financial firms: New evidence from Poland

This study analyses the impact of political connections on the operational performance of non-financial firms in Poland. Using a data set covering the 2001-2011 period, we find that political connections lower firm profitability, as measured on the level of income from sales. The negative impact is the strongest when a firm possesses multiple connections, has politically connected members on its supervisory board, or employs ex-politicians with central government experience. Therefore, our findings do not support claims based on resource dependence theory. The Polish market's specificity is most likely related to the instability of the political scene.