The Effect of Political Connections on Companies Exports Incomes

The issue of export development is the first priority of the government’s economic policies in all countries in the world, including Iran. As the main supporter of any country’s economy, government may play a key role in supporting corporations to facilitate the export of their products. Accordingly, corporations consider political connections as a competitive advantage and they are keen to establish political connections with the government so that they can enhance their export earnings. Hence, the current study has been aimed at investigating the effect of political connections on companies exports incomes of firms in Tehran Stock Exchange. The study sample consists of 150 firms listed on Tehran Stock Exchange during the years 2013 to 2019. To test the research hypotheses, multivariate regression model with panel data has been used by random effect method. The results of testing the research hypotheses reveal that in Tehran Stock Exchange, political connections measured by state institutional ownership and political connections measured by a major state-owned shareholder have a significant positive effect on corporate export Incomes. I.e., in exporting products, corporations with political connections are more successful than the other firms are, and such companies have higher export incomes.