Rajwani, TazeebLiedong, Tahiru Azaaviele2016-07-212016-07-212016-06http://dspace.lib.cranfield.ac.uk/handle/1826/10153This thesis integrates social capital and institutional theories with corporate governance insights to explore the impact of managerial political ties on access to finance, cost of debt and institutional risk exposure. Drawing on an extensive and rigorous assessment of the literature, using a unique set of survey data from 179 firms operating in Ghana, and employing robust analytical techniques, this thesis comprises three interrelated empirical studies which make significant contributions to knowledge. The first empirical study examines the impact of political ties on access to finance and cost of debt. It shows that political ties are positively related to interest rates charged by commercial banks. This positive relationship is weakened by managerial financial ties, and strengthened by borrowing from privately owned banks and the appointment of Big Four audit firms. Altogether, the findings reveal that while political ties enhance access to finance, they increase the cost of debt. They suggest that institutional lapses in emerging countries increase lenders’ perceptions of corporate governance erosion in politically connected firms, hence the high interest rates these firms are charged when they borrow. The second empirical study investigates the effect of political ties on institutional risk exposure. The findings show that political ties do not reduce risk exposure. The findings also show that while industry regulation and public affairs functions affect the strength of the relationship between political ties and institutional risk exposure, corporate social responsibility (CSR) does not. In sum, the findings suggest that the conjectured efficacy of political ties in risk reduction is illusive. The third empirical study explores mediation in the political ties-cost of debt relationship. The findings reveal a negative impact of political ties on corporate governance, and show that political ties increase cost of debt by reducing financial reporting quality and increasing the risk exposure of firms. Through the three empirical studies, this thesis contributes to Corporate Political Activity (CPA) literature, social capital theory and institutional theory. It accentuates the contingent value of political ties and addresses the salient and overlooked “how” question in CPA research. It also fills the lack of insight into the complementarity between CPA and CSR. On the social capital and institutional fronts, this thesis deepens insight into the interactive effects of different types of social capital and highlights how institutional development and organizational legitimacy moderate the value of network ties in emerging countries.en© Cranfield University, 2016. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright holder.Thesis or dissertation