Big Business Owners in Politics

Pramuan Bunkanwanicha and Yupana Wiwattanakantang

No 2008-17, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: This paper investigates a little studied but common mechanism that firms use to obtain state favors: business owners themselves seeking election to top office. Using Thailand as a research setting, we find that the more business owners rely on government concessions or the wealthier they are, the more likely they are to run for top office. Once in power, the market valuation of their firms increases dramatically. Surprisingly, the political power does not influence the financing strategies of their firms. Instead, business owners in top office use their policy-decision powers to implement regulations and public policies favorable to their firms. Such policies hinder not only domestic competitors but also foreign investors. As a result, these politically connected firms are able to capture more market share.

Pages: 50 pages
Date: 2008-08
New Economics Papers: this item is included in nep-cdm, nep-pol and nep-sea
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitcei:2008-17

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