We argue that the analysis of multiple political connections in an event study framework can improve the study of institutional change. Based on a unique data set of multiple political relationships of 4,936 South Korean board of director members, we show that the large business conglomerates, the chaebol, did not benefit from the unexpected conservative election victories in the 2012 South Korean parliamentary and presidential elections. Personal connections to the presidential candidates and to the opposition party were relevant for the stock returns of small firms. Our findings suggest that Korea's political economy has evolved into a hybrid regime in which the political power of large multinational corporations is limited, but political connections still matter for smaller firms. The corruption scandal that led to the impeachment of President Park in 2017 and the long‐term development of market capitalisation appear to be congruent with the results of our study.
