Political Connections and Firms: Network Dimensions

  • 23 Jan 2018

    17:00-18:30, Butler Room, Nuffield College

  • Nuffield Social Networks Seminar   Add to Calendar
Speaker: Stavros Poupakis

University College London, Department of Economics

This event is part of the Nuffield Social Networks Seminar Series.

The interaction of business and politicians is pervasive but mostly analysed bilaterally. Yet, the network dimensions of connections are ubiquitous across countries. Our paper uses a unique dataset for seven economies that documents politically exposed persons (PEPs) and their links to companies, political parties and other individuals. We identify networks of connections and describe the scale, scope and other properties of each of the networks. All countries have a dominant Big Island and there is also evidence of small-world properties (high clustering & short path length). Notably, State-owned Enterprises (SOEs) are prominent in these networks and tend to have high centrality. We find that there is generally a robust, positive association between being connected & levels of sales, output and wages. As regards performance, Return on Assets is mostly negatively signed and significant for connected firms. We extend the analysis to identify how location in a network, extent of ties & centrality are correlated with performance. We find that these network variables have a complex, but often significant, association with firm performance.

The Nuffield Social Network Seminars are convened by Cohen R. Simpson & Laurin B. Weissinger.