Do Political Connections Reduce Job Creation? Evidence from Lebanon

Ishac Diwan and Jamal Ibrahim Haider
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Ishac Diwan: Center for International Development at Harvard University
Jamal Ibrahim Haider: Center for International Development at Harvard University
Authors registered in the RePEc Author Service: Jamal Ibrahim Haidar ()

No 75, Growth Lab Working Papers from Harvard's Growth Lab

Abstract: Using firm-level census data, we determine how politically-connected firms (PCFs) reduce job creation in Lebanon. After observing that large firms account for the bulk of net job creation, we find that PCFs are larger and create more jobs, but are also less productive, than non-PCFs in their sectors. On a net basis, at the sector-level, each additional PCF reduces jobs created by 7.2% and jobs created by non-PCFs by 11.3%. These findings support the notion that politically-connected firms are used for clientelistic purposes in Lebanon, exchanging privileges for jobs that benefit their patrons’ supporters.

Keywords: job creation; politically-connected firms; clientelism; Lebanon (search for similar items in EconPapers)
JEL-codes: D47 J21 J38 L11 L53 (search for similar items in EconPapers)
Date: 2016-06
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Related works:
Working Paper: Do Political Connections Reduce Job Creation? Evidence from Lebanon (2016)
Working Paper: Do Political Connections Reduce Job Creation? Evidence from Lebanon
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Persistent link: https://EconPapers.repec.org/RePEc:glh:wpfacu:75

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