The extant literature on corporate political activities has extensively examined whether and how political connections help in improving performance. We extend this literature by examining whether and how political connections help in profit persistence, a fundamental concern for firms. Using a unique panel dataset of politicians who were elected at either the national or state level in India and examining their membership on the board of directors of firms, we find that firms with political connections demonstrate higher profit persistence. Further, we report that connections with state-level politicians have a larger effect on persistence compared to connections with national-level politicians. This finding emphasizes the importance of micro and recurring benefits in emerging economies such as India, in the form of help with acquiring licenses, permits, land and infrastructure, which are usually provided by state-level politicians relative to policy-related benefits, which are typically provided by national-level politicians. Our results also show that political connections have a greater effect on profit persistence for firms that are affiliated to business groups. Our results suggest that political connections seem to operate as higher-order resources, defined as resources that do not contribute to profits directly but can affect other resources that in turn affect profits over time.

现有关于公司政治活动的文献广泛研究了政治关系是否以及如何有助于提高绩效。我们通过研究政治关系是否以及如何有助于维持利润（企业的一个基本问题）来扩展这一文献。使用印度国家或邦一级选举产生的政治家的独特面板数据集，并检查他们在公司董事会中的成员身份，我们发现具有政治关系的公司表现出更高的利润持久性。此外，我们报告说，与与国家级政治家的联系相比，与州级政治家的联系对持久性的影响更大。这一发现强调了印度等新兴经济体微观和经常性利益的重要性，其形式是帮助获得许可证、许可、土地和基础设施，这些利益通常由国家级政客提供，而政策相关利益包括通常由国家级政治家提供。我们的结果还表明，政治关系对隶属于商业集团的公司的利润持久性有更大的影响。我们的研究结果表明，政治联系似乎作为高阶资源运作，被定义为不直接贡献利润但可以影响其他资源，进而随着时间的推移影响利润的资源。