Businesspeople in Elected Office: Identifying Private Benefits from Firm-Level Returns

David Szakonyi

American Political Science Review, 2018, vol. 112, issue 2, 322-338

Abstract: Do businesspeople who win elected office use their positions to help their firms? Business leaders become politicians around the world, yet we know little about whether their commitment to public service trumps their own private interests. Using an original dataset of 2,703 firms in Russia, I employ a regression discontinuity design to identify the causal effect of firm directors winning seats in subnational legislatures from 2004 to 2013. First, having a connection to a winning politician increases a firm’s revenue by 60% and profitability by 15% over a term in office. I then test between different mechanisms, finding that connected firms improve their performance by gaining access to bureaucrats and not by signaling legitimacy to financiers. The value of winning a seat increases in more politically competitive regions but falls markedly when more businesspeople win office in a convocation. Politically connected firms extract fewer benefits when faced with greater competition from other rent-seekers.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
Working Paper: Businesspeople in Elected Office: Identifying Private Benefits from Firm-Level Returns (2017)
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:cup:apsrev:v:112:y:2018:i:02:p:322-338_00

Access Statistics for this article

More articles in American Political Science Review from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().