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

Kód výsledku v 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>

Výsledek na webu

<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>

Jazyk výsledku

angličtina

Název v původním jazyce

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

Popis výsledku v původním jazyce

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.

Název v anglickém jazyce

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

Popis výsledku anglicky

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.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50201 - Economic Theory

Projekt

—

Návaznosti

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

Rok uplatnění

2021

Kód důvěrnosti údajů

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

Název periodika

Public Choice

ISSN

0048-5829

e-ISSN

—

Svazek periodika

188

Číslo periodika v rámci svazku

1-2

Stát vydavatele periodika

US - Spojené státy americké

Počet stran výsledku

34

Strana od-do

121-154

Kód UT WoS článku

000537382600001

EID výsledku v databázi Scopus

2-s2.0-85086001218