Financial markets: Bonds, stocks, and politically-connected firms

This chapter assesses the issues of politically connected firm, by first defining such entities and then identifying the typologies and level of advantages that enjoys because of their contiguity to the public power. Finally the chapter focuses on the level of access to finance and cost of capitals. The results confirm the empirical evidences as provided by recent studies on business-politics relations, which show that political connected firms remark better access to finance, stronger market power and some kind of tax benefit.