 The Matching of Heterogeneous Firms and PoliticiansMPRA Paper from University Library of Munich, Germany Abstract: We use a Chinese firm-director level panel dataset to examine the matching of heterogeneous firms and politicians. Based on 36,308 detailed biographies, we identify individuals that previously held bureaucratic positions and classify the rank of each position in the Chinese political hierarchy. Using this direct measure of political capital, we examine how firms with heterogeneous productivity match with politicians with different political strength. Our results indicate a positive assortative matching in the political markets. More productive firms recruit more powerful politicians. Further, the preference for political capital relative to conventional human capital increases in firms' dependence on external financing and decreases in the efficiency of local governments. Conditional on the endogenous matching, new hires with greater political strength receive more compensation than their co-workers in the same cohort. The marginal effect of a one-step rise in the political ladder exceeds the marginal effect of raising education attainment from, for example, high school to college. Keywords: firm heterogeneity; politician; political hierarchy; matching (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:23508 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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