Political Investments and the Winner of Government Grants

Hsuan-Chu Lin (), She-Chih Chiu and Hsing-Chu Wang ()
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Hsuan-Chu Lin: Department of Accountancy, Graduate Institute of Finance and Banking, National Cheng Kung University, No. 1, University Road, Tainan City 701, Taiwan
She-Chih Chiu: Department of Accountancy, National Taipei University, No. 151, University Rd., Sanxia district, New Taipei City 237, Taiwan
Hsing-Chu Wang: Department of Accountancy, Graduate Institute of Finance and Banking, National Cheng Kung University, No. 1, University Road, Tainan City 701, Taiwan

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2023, vol. 26, issue 02, 1-24

Abstract: This paper investigates whether corporate political connections and corporate donations to national-level political campaigns are associated with the allocation of government resources. Based on a sample of Taiwanese publicly held companies, the findings show that political campaign contributions are associated with successful applications for government innovation subsidies as well as more government innovation subsidies. The findings also show that companies that show their loyalty by only donating to the ruling party’s candidates in campaigns receive higher amounts of government innovation subsidies than other companies. Overall, the findings provide evidence that political connections through political campaign contributions may affect government’s decision for resource allocation.

Keywords: Political contributions; R&D; political connections (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S0219091523500157

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