Why is there significant variation in rent extraction amongst high-income democracies? A large number of political economy investigations into this research question have found that a long period of democratic rule and high per capita income are associated with less rent extraction amongst public policy-makers. However, attempts to explain the residual, yet significant, variation in rent extraction amongst countries that possess both these characteristics have been significantly more circumspect and disputed. The thesis explores how the distribution of policy-making responsibilities between electorally accountable decision-makers (EDD) and their electorally unaccountable (NEDD) public policy-making counterparts, determines the optimal level of rents extracted in any given high-income democracy context. Specifically, the thesis formally models how: (1) variation in the EDD/NEDD ratio, by altering (2) voters’ evaluation of incumbent competency, changes (3) the incentives that policy-makers, wishing to remain in office, have to minimize their short term level of rent extraction in order to signal their competency and hopefully retain office. Given these ‘career concerns’ the theoretical model predicts that an increase or decrease in the EDD/NEDD ratio will be associated with more or less rent extraction. This hypothesis is then tested empirically, primarily using an augmented version of Persson and Tabellini’s (2003) dataset. Specifically, the thesis tests whether (1) the EDD/NEDD ratio can predict variation in rent extraction only amongst high-income democracies; (2) whether voters, and not just elites, use the EDD/NEDD ratio to update their beliefs regarding the determinants of rent extraction; and (3) whether the EDD/NEDD ratio affects the level of rent extraction, once controlling for other institutional variables (Efficacy of Elections) also associated with variation in voter evaluation of incumbents’ competency. Establishing that the EDD/NEDD ratio does robustly predict variation in rent extraction is a significant finding, as it can enable analysts to predict how changes in policy-making contexts may affect the incentive for good governance in this sub-set of countries. However, the results are (1) exploratory in nature, and also (2) contingent on other factors (regime type and institutional variation), meaning that while significant, they cannot be generalized to non-democratic contexts.

The CEO bonus of banking companies has become a hot media topic around the world accelerated by the recent financial crisis of 2007-2008 where the excessive pay and risk-taking in the banking sector were recognized. This has raised public concerns around executive remuneration and the transparency of the companies. According to the regulations, the bonus of the CEO is indexed to the firm´s performance. However, the compensation of many CEO’s has been paid out during the financial crisis although the firms have lost money. This has consequently led to rigorous regulations of the financial institutions with the attempt to ensure long-term focus and consider outstanding risk through variable remuneration payments.   Although the remuneration, and specifically annual bonus, has caught a lot of attention by the public and the media, it has been mostly overlooked by regulatory authorities and academics up until today. This research represents the first attempt to examine the disclosure and transparency of CEO annual bonus plans of twenty leading EU banks through the employment of in-depth and descriptive approach.. The purpose of this study is to explore the issue of CEO annual bonus plan with respect to the disclosure of the information provided in the banking companies’ financial reports of 2011. The level of transparency of the companies are scrutinized and measured accordingly to five bonus features, which may contribute to the transparency of annual bonus plans. The bonus plan is regarded as transparent if the majority of the following bonus criteria are fulfilled by the companies; (1) the application of simple targets through a single performance condition; (2) the application of published targets accessible to shareholders; (3) the disclosure of methods applied in order for shareholders and other stakeholders to determine whether the given performance target(s) has been fulfilled; (4) bonus payments in form of cash; (5) the disclosure of annual bonus cap.   The findings of this study show that a significant part of the banks can be considered as non-transparent due to the failure of fulfilling the given bonus plan features, meaning that the issue of disclosure and transparency of annual bonus plans should raise concern for shareholders and regulators, both on the EU-level and nationally. This study evidently shows that the level of information disclosed as to bonus plans of CEO various tremendously between the countries and sometimes also between the companies in the same country, which indicate the issue of disclosure and transparency of annual bonus plans need to be enhanced through regulations.

本研究主要探討高階經理人之選擇權與公司績效之關聯性，研究發現，公司發給高階經理人之選擇權價值與Tobin’s Q呈正向關係。為區分誘因調整（the incentive alignment perspective）與利益榨取（the rent extraction perspective）兩觀點，本研究將選擇權預測值分為經濟因素、公司治理與殘值三部分。研究結果顯示依據經濟因素所預測出之選擇權價值與Tobin’s Q呈正向關係，其符合誘因調整觀點，即發放選擇權可減少代理問題。而依公司治理所預測出之選擇權價值，則與Tobin’s Q 呈負向關係，此亦與利益榨取觀點相符，即當公司治理較差時，發給高階經理人之選擇權往往較股東最適程度為高。此外，本研究亦發現選擇權與Tobin’s Q有一非線性關係。 / This study examines the association between employee stock options (ESOs) and future firm performance (Tobin’s Q). The evidence shows that the value of ESOs granted to CEOs in the current and past five years are positively associated with Tobin’s Q. To test the incentive alignment perspective and the rent extraction perspective, this study predicts the value of ESOs granted to CEOs due to economic determinants, governance quality and residual value. I find that the predicted component of ESO grants due to economic determinants are positively related with Tobin’s Q, consistent with the incentive alignment perspective that ESOs are granted to reduce the agency problem. Further, the predicted component of ESO grants attributable to the governance factors are negatively associated with Tobin’s Q, indicating that for firms with poor governance, the actual level of incentives executives receive may go well beyond the optimal level for shareholders. The negative association is consistent with the rent extraction perspective. Moreover, this study also finds a non-linear association between the Tobin’s Q and the ESO grant values.

Cette thèse explore les implications des stratégies hors marché des entreprises en termes de performance. Elle attire notamment l'attention sur la nature paradoxale des stratégies hors-marché ainsi que sur l'importance pour les entreprises de former des portefeuilles spécifiques de ce type de stratégie. En utilisant une approche fondée de la théorie de l'échange social et sur la théorie de la dépendance aux ressources, cette thèse tout d'abord analyse les conditions pour lesquelles les entreprises sont soumises à une extraction de “rente” de la part des politiciens. Elle explore ensuite l'impact de ces liens politiques sur la performance financière des entreprises. Elle distingue notamment différents types de liens politiques qui exposent les entreprises à différents niveaux d'incertitude quant à la continuité de leur échange avec les politiciens, et à différents niveaux de dépendance à leurs ressources à postériori. Enfin, cette thèse examine comment l'engagement communautaire des entreprises pourrait agir comme une stratégie complémentaire aux liens politiques, et comment cette complémentarité peut permettre d’obtenir de meilleurs retours financiers de ces liens politiques. Les hypothèses de cette thèse sont empiriquement testées sur des données longitudinales uniques couvrant différents types de liens entre l’ensemble des politiciens britanniques et toutes les sociétés cotées en bourse au Royaume-Unis, sur une période allant de 2002 à 2011. En prenant une position critique sur la valeur que les entreprises peuvent tirer des stratégies hors-marché, cette thèse contribue à la littérature en management stratégique, en particulier à celle portant sur les stratégies hors-marché des entreprises et leurs implications en termes de performance financière / This dissertation looks into performance implications of firms’ non-market strategies. It draws attention to the double-blade nature of firms’ non-market strategies, as well as the importance for the firm of forming a right portfolio of such strategies. Using insights from social exchange theory and resource dependence theory, it first outlines the conditions under which firms will be subject to rent extraction by politicians. It then looks into the impact of political linkages on firms’ financial performance, differentiating between different types of political linkages; which expose a firm to different levels of uncertainty regarding the continuity of exchange with the politician, and different levels of ex-post dependency on the politician. Finally it investigates how community engagement might act as a complement to firms’ political linkages, and how such complementarity may help to achieve improved financial returns from those political linkages. The predictions of the essays are empirically tested using a unique longitudinal dataset covering various types of linkages between all politicians and all publicly listed companies in the UK, for the period from 2002 to 2011. Taking a critical stand on the value to be drawn from firms’ non-market strategies, this dissertation contributes to strategic management literature, particularly the literature on firms’ non-market strategies and their implications on financial performance