EXAMINING THE LINK BETWEEN POLITICAL CONNECTIONS AND NISHAT BUSINESS GROUP'S PROSPERITY

Abstract

This study investigates the impact of political connections and collusions with other business groups on the development and success of Nishat Group, a family-owned business group in Pakistan. Business groups, characterized by a constellation of formal and informal ties, have attracted significant attention in research. While some studies have focused on business groups directly involved in politics, this study examines the indirect methods firms use to obtain state favors. One such method is through political connections, where firms have ties to influential individuals or politicians. The incentive for corporations to become politically connected is the access to state rents, which can manifest in various forms such as preferential treatment, lighter taxation, and relaxed regulatory oversight. However, the benefits of these connections must outweigh the costs for corporate elites.

Nishat Group, considered Pakistan's top business group, has thrived for the past two decades under the leadership of Mian Mansha, regarded as the country's richest man. This study specifically focuses on family-owned business groups, as defined by Cuervo-Cazurra (2006), where individuals or families are involved in the ownership, control, and management of business firms.

The research aims to assess the development and success of Nishat Group, shedding light on the role of political connections and collusions with other business groups. By analyzing the impact of these factors, the study aims to provide a deeper understanding of the financial performance and strategies of family-owned business groups. The findings of this research contribute to the existing literature on business groups and provide practical insights for policymakers and business practitioners.