Political connections and preferential access to finance: The role of campaign contributions

• 成果类型: Article; Proceedings Paper
• 署名作者: Claessens, Stijn; Feijen, Erik; Laeven, Luc
• 署名单位: International Monetary Fund; University of Amsterdam; Centre for Economic Policy Research - UK; The World Bank
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2006.11.003
• 发表日期: 2008
• 页码: 554-580
• 关键词: Campaign contributions; ELECTIONS; CORRUPTION; preferential lending

摘要

Using novel indicators of political connections constructed from campaign contribution data, we show that Brazilian firms that provided contributions to (elected) federal deputies experienced higher stock returns than firms that did not around the 1998 and 2002 elections. This suggests that contributions help shape policy on a firm-specific basis. Using a firm fixed effects framework to mitigate the risk that unobserved firm characteristics distort the results, we find that contributing firms substantially increased their bank financing relative to a control group after each election, indicating that access to bank finance is an important channel through which political connections operate. We estimate the economic costs of this rent seeking over the two election cycles to be at least 0.2% oh gross domestic product per annum. (C) 2007 Elsevier Ltd All rights reserved.