The Interplay of Political Ties and Ownership Structure in Emerging Markets: A Signaling View

The John Gokongwei School of Management invites you to a Brown Bag Session on "The Interplay of Political Ties and Ownership Structure in Emerging Markets: A Signaling View". Our presenters are Dr Roberto Martin N Galang, Dean of the John Gokongwei School of Management, Ateneo de Manila University, and Dr Maria Regina Lucia M Lizares, Dean of the Cesar EA Virata School of Business, University of the Philippines. The paper is co-authored by Dr Ryan Federo, Associate Professor at the Department of Business Economics - Universitat de les Illes Balears, Palma de Mallorca, Spain.

This will be held on Thursday, 18 April 2024 from 12:00 - 1:30PM at the Cabochan Room, SOM 307 and online via Zoom.
Please register here: https://bit.ly/jgsombrownbag18apr2024

Brief Description of the Topic:
Many firms establish political ties by appointing politically connected directors to operate effectively in emerging markets. However, the extant corporate socio-political engagement literature offers inconclusive findings regarding the link between political ties and firm outcomes. Our study posits that in emerging markets with weak state capacities, politically connected directors can be construed as signals to generate legitimacy and positive stakeholder reputation. Drawing on signaling theory, we argue that political connection on the board is associated with higher firm value and ESG ratings. We also claim that these relationships are contingent on firm ownership structures, which enhance the politically connected directors’ signaling effect on firm outcomes. Our analyses on Philippine publicly listed corporations show that the presence of politically connected directors is positively associated with enterprise value and ESG scores. Moreover, we find that the positive association between political connection on the board and enterprise value is stronger in firms affiliated to business groups than non-affiliated ones, whereas the positive link of politically connected directors to ESG score is more pronounced in firms with dispersed than concentrated ownership. We discuss our study’s implication on management research and practice.

About the Speakers:
Dr. Roberto Martin N. Galang is the Dean of the John Gokongwei School of Management in Ateneo de Manila University. He was formerly a Senior Private Sector Specialist for the World Bank. At the World Bank, his responsibilities revolved around projects to foster competition, enhance productivity, improve business regulations, facilitate trade and promote innovation in support of private sector development in countries like the Philippines, Timor Leste, Malaysia, Indonesia, and Papua New Guinea. Prior to joining the World Bank Group, Robby has had more than a decade of international experience in the analysis of strategic and regulatory issues for private corporations. He was an assistant professor of business strategy at Ateneo de Manila University and the Asian Institute of Management where he conducted research on the impact of government institutional inefficiencies on firm performance. He completed his PhD in Management from the IESE Business School, his MSc in Development Economics from Oxford University and his AB in Communications from Ateneo de Manila University.

Maria Regina Lucia (Gina) M. Lizares is an Associate Professor of the Department of Business Administration and current Dean of the UP Cesar E.A. Virata School of Business (vsb.upd.edu.ph/faculty/lizares). She was a former business professional with over 20 years of extensive, rounded professional experience in multi-cultural firms: over 10 years leading the people function in a professional service firm, 7 years of strategy work as a consultant and as part of planning groups of corporates, and 3 years of equity research. She obtained her BS in Business Administration (magna cum laude), MS in Management, and PhD in Business Administration from UP. She also obtained her MBA from IESE (Spain) and MA in International Business and Economic Development (distinction) as a British Council scholar from the University of Reading (UK). Her research interests are in organization, corporate governance, industrial organization, and finance.