Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections

Bang Dang Nguyen, Quoc-Anh Do and Yen Teik Lee

No 10526, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Using the regression discontinuity design of close gubernatorial elections in the U.S., we identify a significant and positive impact of the social networks of corporate directors and politicians on firm value. Firms connected to elected governors increase their value by 3.89%. Political connections are more valuable for firms connected to winning challengers, for smaller and financially dependent firms, in more corrupt states, in states of connected firms? headquarters and operations, and in closer, smaller, and active networks. Post-election, firms connected to the winner receive significantly more state procurement contracts and invest more than do firms connected to the loser.

Keywords: Close gubernatorial election; Corruption; Firm value; Political connection; Procurement; Regression discontinuity design; Social Networks (search for similar items in EconPapers)
JEL-codes: D72 D73 G28 G30 G34 G38 H57 (search for similar items in EconPapers)
Date: 2015-04
New Economics Papers: this item is included in nep-bec, nep-cdm, nep-pol and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
https://cepr.org/publications/DP10526 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections (2015)
Working Paper: Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections (2015)
Working Paper: Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections (2013)
Working Paper: Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:10526

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP10526

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().