THE EFFECT OF CRONYISM ON DEBT ACCESS: THE CASE OF TUNISIAN LISTED FIRMSDownload This Article
Fayrouz Bencheikh, Neila Boulila Taktak
The objective of this paper is to study the effect of cronyism on debt access. Cronyism is concretized by two factors: regulation and political connections. The study is carried out on a sample of Tunisian firms for the period between 2006-2013. First, we test the effect of regulation and political connections on debt access by proceeding with a multiple linear regression model. Results show that regulation is positively associated with the debt ratio. However political connections do not increase the debt ratio. Then, we applied a difference-in-difference model to take account of the natural experiment of the political uprising. The effect of cronyism is confirmed only before this event.
Keywords: Debt Access, Regulation, Political Connections, Cronyism, Political Uprising
How to cite this paper: Bencheikh, F., & Taktak, N. B. (2017). The effect of cronyism on debt access: The case of Tunisian listed firms. Corporate Ownership & Control, 14(4), 77-84. http://doi.org/10.22495/cocv14i4art6