Political connections and firm value: Evidence from the regression discontinuity design of close gubernatorial elections

• Main Authors: DO, Quoc-Anh, LEE, Yen Teik, NGUYEN, Bang D.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2015
• Subjects: Political connection; firm value; social networks; close gubernatorial election; regression discontinuity design; corruption; procurement; American Politics; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5662; https://ink.library.smu.edu.sg/context/lkcsb_research/article/6661/viewcontent/PoliticalConnections_FirmValue_2015_wp.pdf
• Institution: Singapore Management University

Using the regression discontinuity design of close gubernatorial elections in the U.S., we identify a significant and positive impact of the social networks of corporate directors and politicians on firm value. Firms connected to elected governors increase their value by 3.89%. Political connections...