Connecting to Power: Political Connections, Innovation, and Firm Dynamics

• 成果类型: Article
• 署名作者: Akcigit, Ufuk; Baslandze, Salome; Lotti, Francesca
• 署名单位: University of Chicago; National Bureau of Economic Research; Center for Economic & Policy Research (CEPR); Federal Reserve System - USA; Federal Reserve Bank - Atlanta; European Central Bank; Bank of Italy
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA18338
• 发表日期: 2023
• 页码: 529-564
• 关键词: private returns; GROWTH; selection; MODEL; PRODUCTIVITY; reallocation; persistence; distortions; uncertainty; allocation

摘要

How do political connections affect firm dynamics, innovation, and creative destruction? We extend a Schumpeterian growth model with political connections that help firms ease bureaucratic and regulatory burden. The model highlights how political connections influence an economy's business dynamism and innovation, and generates a number of implications guiding our empirical analysis. We construct a new large-scale data set for the period 1993-2014, on the universe of firms, workers, and politicians, complemented with corporate financial statements, patent data, and election data, so as to define connected firms as those employing local politicians. We identify a leadership paradox: market leaders are much more likely to be politically connected, but much less likely to innovate. Political connections relate to a higher rate of survival, as well as growth in employment and revenues, but not in productivity-a result that we also confirm using the regression discontinuity design. At the aggregate level, gains from political connections do not offset losses stemming from lower reallocation and growth.