Beyond Political Connections : A Measurement Model Approach to Estimating Firm-level Political Influence in 41 Economies
This paper considers the political influence of private firms. While such influence is frequently discussed, there is limited analysis of how firms combine political interactions, and under what conditions, to gain influence. The exception is the large literature on firms with political connections, with findings generally showing large gains to firms with those direct relationships. This paper extends the discussion of influence beyond political connections alone and uses a rich firm-level data set from 41 economies, which includes information on several interactions with political actors. Using a Bayesian item response theory (IRT) measurement model, an index of Political Influence is estimated, with the prior assumption that political connections yield more influence. Membership in a business association is found to enhance influence, while such influence is offset by bribes, state ownership, firm size, and a reliance on collective lobbying. Political Influence is found to be broadly higher in economies with poorer governance but more dispersed in those with better governance. Within economies, higher influence is associated with a higher likelihood of reporting a small number of competitors, higher sales, and lower labor inputs relative to sales. These findings are robust across several models that incorporate high-dimensional fixed effects, incorporating measurement error in the index, and varying these relationships over several governance measures
Year of publication: |
2022
|
---|---|
Authors: | Francis, David C.. ; Kubinec, Robert |
Publisher: |
Washington, DC : World Bank |
Saved in:
freely available
Extent: | 1 Online-Ressource |
---|---|
Series: | Policy Research Working Paper ; 10119 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | World English en_US |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013545457
Saved in favorites
Similar items by person
-
Francis, David C.., (2022)
-
Tracking Government Responses to Covid-19: The CoronaNet Research Project
Cheng, Cindy, (2021)
-
Why the Two-Way Fixed Effects Model Is Difficult to Interpret, and What to Do About It
Kropko, Jonathan, (2020)
- More ...