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PurposeThis paper investigates the market responses towards four types of politically connected (PCON) firms during two political events – general election and change of leader in Malaysia.Design/methodology/approachThe authors capture the market response using cumulative abnormal return and further test it using regression analysis. The authors use a sample of 376 politically connected (PCON) and non-politically connected (non-PCON) firms from 2002 to 2013.FindingsThe market reacted negatively towards government-linked companies (GLC) during both events, showing that GLCs are negatively perceived by the market during political instability. On the other hand, the reaction of the market towards firms connected by businessmen does not differ from other firms. When compared to the findings of past literature, it shows the decreasing influence that businessmen have over the government leader. In further analysis, this study finds firms that are connected to the incoming government leader recorded a higher CAR as compared to firms connected to the outgoing government leader.Practical implicationsThe authors’ study offers several practical implications. Knowing how the market responds to the different types of political connections might prove beneficial to investors. With this information, investors can recognize stocks with potential returns before the event date and may consider buying or selling them to capture a short-term profit. The authors’ findings may also have important implications for the management of PCON firms in terms of implementing an effective risk management and asset allocation plan to safeguard their value during political events that may disrupt the stability of their firms.Originality/valueThis paper provides an insight on how the markets have a different perception towards different types of politically connected firms during short-run political events. Past studies usually categorize political connection into a single category. With this separation, the authors are able to see how their individual CAR differs from other types of PCON.

Motivation: Although female clients are the main target of most Microfinance Institutions (MFIs), male-female workforce ratio in microfinance operations is not proportionate. There is a consensus that a greater female presence in the workforce at all hierarchical levels could enhance the financial performance of MFIs thanks to women's tougher commitments and better managing capacity. Purpose: There is scarce research investigating which hierarchical levels of female workforce contribute to MFIs' financial performance. This study aims at filling this gap by jointly analysing the effect of female participation at all hierarchical levels of MFIs, which is relatively rare in the existing literature, especially in microfinance. Methods and approach: We use data from 172 MFIs in Eastern Europe and Central Asian countries (EECA) for the period 1996-2014. The data were then analysed by ordinary least squares, fixed, and random effects models, along with several diagnostic tests. Findings: We find that female board members and female clients contribute positively to the financial performance of MFIs. The literature presents these outcomes as being due to women's' better organizational and monitoring techniques, and more responsible use of loans, respectively. However, our analysis shows that female managers and loan officers may impair financial performance to some extent, possibly because they face cultural limitations and safety obstacles, resulting in their being less persuasive and effective than men, especially in the process of collecting arrears payments. Policy implications: Our study suggests that MFIs in the EECA context may improve their financial sustainability by reconsidering their organizational choices, such as operational recruitment, placing women at the top of the decision-making process. At the lower levels of the hierarchy, particularly loan officers, it would be advisable to support them in the interaction with male customers, so that they can adopt more effective techniques in the loan collection phases. MFIs can also scale up their loan activities to more women since their representation in the client base is relatively low in the EECA region.

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