The Costs of Political Influence
Firm-Level Evidence From Developing Countries
Datos Bibliográficos
| ID | 12802464 |
|---|---|
| Autores | Raj M Desai (0000-0002-1202-1680, autor de correspondencia), Anders Olofsgård (0000-0002-0455-0822) |
| Año | 2011 |
| Volumen | 6 |
| Número | 2 |
| Páginas | 137-178 |
| Fecha de publicación | 2011-08-01 |
| Peer Reviewed | Sí |
| Open Access | No |
| Tipo | ARTICLE |
| Revista | Quarterly Journal of Political Science (JOURNAL) |
| Identificadores de la revista | ISSN: 1554-0626 • E-ISSN: 1554-0634 |
| Editorial | Now Publishers (PUBLISHER • NL) |
| DOI | 10.1561/100.00010094 |
| OpenAlex | W2067046617 |
| Idioma | EN |
| Citas recibidas | 10 |
| Referencias citadas | 33 |
Arrangements by which politically connected firms receive economic favors are a common feature around the world, but little is known of the form or effects of influence in business-government relationships. We present a simple model in which influence requires firms to provide goods of political value in exchange for economic privileges. We argue that political influence improves the business environment for selected firms, but restricts their ability to fire workers. Under these conditions, if political influence primarily lowers fixed costs over variable costs, then favored firms will be less likely to invest and their productivity will suffer, even if they earn higher profits than non-influential firms. We rely on the World Bank’s Enterprise Surveys of approximately 8000 firms in 40 developing countries, and control for a number of biases present in the data. We find that influential firms benefit from lower administrative and regulatory barriers (including bribe taxes), greater pricing power, and easier access to credit. But these firms also provide politically valuable benefits to incumbents through bloated payrolls and greater tax payments. Finally, these firms are worse-performing than their non-influential counterparts. Our results highlight a potential channel by which cronyism leads to persistent underdevelopment
Business · Cronyism · Developing country · Economic growth · Economics · Government (linguistics · Market economy · Monetary economics · Payment · Politics · Productivity · Public economics · Underdevelopment · Value (mathematics · Corporate Finance and Governance · Political Influence and Corporate Strategies · Finance
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| Obras citantes distintas | 10 |
|---|---|
| Citas por año | 0,77 |
| Intervalo de citas | 2013 - 2026 (14) |
| Velocidad de citación | current |
| Altamente citado | No |
| Tipos de cita | Neutras: 10 |