The Impact of Political Connections on Forward-Looking Information Disclosure and its reflection on the efficiency of investment decisions: An Empirical Study on Listed Firms in the Egyptian Stock Exchange

Document Type : Original Article

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Assistant Professor of Accounting Faculty of Commerce - Suez Canal University Egypt

Abstract

This research aims to determine the impact of corporate political connections on Forward-Looking Information Disclosure, in addition to the reflection of this Disclosure on the efficiency of investment decisions. To achieve these objectives, the researcher conducted an applied study. The study relied on all companies operating in the Egyptian stock market. Where Some restrictions were applied, bringing the total sample number to (142) companies, in order to test (3) research hypotheses through (5) statistical models. Through the applied study, the researcher finds several main results: Analysis of the factors affecting Forward-Looking Information Disclosure. The applied results confirmed the existence of a positive relationship with (company size, return on assets, board of directors’ size, board of directors’ independence) and a negative relationship with (financial leverage and board of directors’ duality), It also confirmed the existence of a positive impact of corporate political connections on Forward-Looking Information Disclosure, in addition to the presence of a positive impact of Forward-Looking Information Disclosure on the efficiency of investment decisions. Based on the previous results, the researcher recommended the necessity of paying attention to regulate corporate political connections and Forward-Looking Information Disclosure in the Egyptian stock market.

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