Firms’ political ties are a form of non-market strategies and have drawn much attention in past decades. Although the research in corporate political activity (CPA) demonstrates firms can benefit from political ties, they rarely consider the role of connected politicians in these ties. This is a significant oversight given that firms can only enjoy the benefit of political ties when the other party is willing to do so. For instance, when firms are in scandal, the connected politicians see political ties with firms as a liability. In these circumstances, firms are not able to exercise their political ties, and the nature of political ties is likely to change or even be broken. By using case studies in four Taiwanese companies, this study depicts the dynamics between companies and connected politicians.
Non-market strategy, Political ties, Corporate Scandal, Case study