The value of political connections in the post-transition period: evidence from Czechia

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F21%3A10411606" target="_blank" >RIV/00216208:11230/21:10411606 - isvavai.cz</a>

Result on the web

<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=IMI6vBiyVk" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=IMI6vBiyVk</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1007/s11127-020-00816-3" target="_blank" >10.1007/s11127-020-00816-3</a>

Result language

angličtina

Original language name

The value of political connections in the post-transition period: evidence from Czechia

Original language description

This paper studies the relationship between political connections and reported profits using a newly compiled dataset on all corporate donations to political parties in Czechia during its post-transition period (between 1995 and 2014). I develop a dynamic matching approach to identify non-connected firms that are similar to their connected peers on a range of observable characteristics, including profitability prior to becoming connected. I find that being politically connected is associated with superior reported profits: I estimate conservatively that the connected firms outperform their non-connected but otherwise similar competitors by 8-12% following the establishment of the connection, which is a larger effect than found previously for more developed economies. What is more important, however, I find that the effect virtually vanishes for non-connected firms aligned closely with the public sector. That evidence suggests that other forms of connections, such as personal ties and those established at subnational levels of government, such as regional and municipal governance tiers, are likely to have played a significant role in Czechia during its post-transition period.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50201 - Economic Theory

Project

—

Continuities

S - Specificky vyzkum na vysokych skolach<br>I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2021

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Public Choice

ISSN

0048-5829

e-ISSN

—

Volume of the periodical

188

Issue of the periodical within the volume

1-2

Country of publishing house

US - UNITED STATES

Number of pages

34

Pages from-to

121-154

UT code for WoS article

000537382600001

EID of the result in the Scopus database

2-s2.0-85086001218