The Impact of Politically Connected CEOs and Boards of Directors on Firm Performance: A Study of Vietnamese Family and Nonfamily Firms

Integrating new institutional economics and resource dependence theory, this study investigates whether in transition economies, characterized by shifting from centrally commanded to more market-oriented economies, there are performance differences among family firms (FFs), nonfamily firms (non-FFs), and former state-owned enterprises (former SOEs), and whether political connections affect these differences. Our findings suggest that FFs outperform non-FFs and former SOEs, unless non-FFs have politically connected CEOs. The performance gap in favor of FFs increases at high levels of board political connection intensity. Among FFs, the top-performing ones either promote nonfamily leadership or combine family leadership with politically connected boards of directors.