أثر الروابط السياسية والملكية العائلية على جودة التقارير المالية: دراسة تطبيقية على الشركات المقيدة بسوق المال المصري

Abstract EN

Purpose: this paper aims to investigate the effect of political connections and family ownership each separately and the interactive effect between them on the quality of financial reports.

design / methodology / approach: to analyze the research hypotheses, the author used a panel data model by ordinary least squares' depending on historical data from VY.

active non-financial firms listed on the Egypt stock exchange during the period of 2013-2017.

the final data set comprises a total 360 firm-year observations from twelve major non-financial industry classifications.

findings: the current study found that there is a positive correlation between family ownership and political connections.

in addition, the study found that there is a positive impact of family ownership on the quality of financial reports, and there is a positive relationship between political connections and the quality of financial reports, while there is a negative relationship between family firms with political connections and the quality of financial reports.

research limitations / implications: this research is limited to dealing with direct family ownership structures and does not deal with indirect family ownership.

likewise, this research docs not deal with the political tics in companies that arise through direct government ownership.

also, this research was limited to using linear regression analysis that did not address nonlinear regression or the structural equation model to examine the effect of family ownership and political connections on the quality of financial reports.

practical implications: practitioners such as investors and lenders dealing with companies in the Egyptian capital market, which is considered one of the emerging markets with low protection for small investors, benefit from the results of this study due to the impact of family ownership and political connections when making their investment decisions.

at the same time, the study helps provide important information about the business environment and conditions.

investing in developing countries like Egypt.

originality / value: the current study contributes to the literature by showing that different characteristics of companies such as family ownership and political connections can produce different consistent results between an emerging and developed economy, especially in the area of quality of financial reporting.

as this is the first study to analyze these relationships in the financial market in Egypt, where the study demonstrates the important role of the impact of political connections and family ownership separately, in addition to the joint effect of political connections and family ownership on the quality of financial reports through empirical evidence.