Do Businessmen Make Good Governors?

Florian Neumeier ()

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: This paper empirically evaluates the economic performance of U.S. state governors who came to the position from a business background (CEO governors), focusing on the growth rate of real personal income per capita, unemployment rate, and income inequality. Methodologically, we apply a matching method to account for the endogeneity of political selection. Using entropy balancing, we identify credible counterfactuals for CEO governors, that is, governors without a business background who took office under similar economic and fiscal situations. We find, first, that businesspeople tend to take office in times of economic and fiscal strain. Second, the tenures of CEO governors are associated with a 0.6 percentage points higher annual income growth rate and a 0.6 percentage points lower unemployment rate than are the tenures of non-CEO governors. Also, state-level income inequality decreases when CEO governors hold office, indicating that low-income households benefit from the economic upswing. Third, the positive effect of having a CEO governor increases with time in office. Fourth, Republican CEO governors perform slightly better than their Democratic colleagues.

Keywords: U.S. Governors; U.S. politics; U.S. states; economic growth; unemployment; income inequality; businessmen; CEO; entropy balancing (search for similar items in EconPapers)
JEL-codes: C21 E24 E60 O47 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015
New Economics Papers: this item is included in nep-mac and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://www.uni-marburg.de/fb02/makro/forschung/mag ... 19-2015_neumeier.pdf First 201519 (application/pdf)

Related works:
Journal Article: DO BUSINESSMEN MAKE GOOD GOVERNORS? (2018)
Working Paper: Do businessmen make good governors? (2018)
Working Paper: Do Businessmen Make Good Governors? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201519

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