Gains from Early Support of a New Political Party

Marco Leonardi, Rossella Mossucca, Fabiano Schivardi, Battista Severgnini

Research output: Working paperResearch

Abstract

We study the potential benefits and mechanisms of firms’ political connections by analyzing the Italian experience, where, in the early nineties, Silvio Berlusconi, a rich TV tycoon, became the leader of the conservative political coalition. Using firm-level data, we find that the 101 companies supporting Berlusconi’s successful bid to become prime minister did better than controls in terms of sales and employment but not of productivity. The results are confirmed when we instrument the decision to support Berlusconi with electoral outcomes in the 1921 elections. We also find suggestive evidence that the supporters’ superior performance is stronger in sectors with high external financial dependence and high advertising intensity.
Original languageEnglish
Place of PublicationBonn
PublisherIZA
Number of pages28
Publication statusPublished - 2019
SeriesIZA Discussion Paper
Number12549

Keywords

  • Political connections
  • Productivity
  • Policy regulation

Cite this

Leonardi, M., Mossucca, R., Schivardi, F., & Severgnini, B. (2019). Gains from Early Support of a New Political Party. Bonn: IZA. IZA Discussion Paper, No. 12549
Leonardi, Marco ; Mossucca, Rossella ; Schivardi, Fabiano ; Severgnini, Battista. / Gains from Early Support of a New Political Party. Bonn : IZA, 2019. (IZA Discussion Paper; No. 12549).
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Leonardi, M, Mossucca, R, Schivardi, F & Severgnini, B 2019 'Gains from Early Support of a New Political Party' IZA, Bonn.

Gains from Early Support of a New Political Party. / Leonardi, Marco; Mossucca, Rossella; Schivardi, Fabiano; Severgnini, Battista.

Bonn : IZA, 2019.

Research output: Working paperResearch

TY - UNPB

T1 - Gains from Early Support of a New Political Party

AU - Leonardi, Marco

AU - Mossucca, Rossella

AU - Schivardi, Fabiano

AU - Severgnini, Battista

PY - 2019

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N2 - We study the potential benefits and mechanisms of firms’ political connections by analyzing the Italian experience, where, in the early nineties, Silvio Berlusconi, a rich TV tycoon, became the leader of the conservative political coalition. Using firm-level data, we find that the 101 companies supporting Berlusconi’s successful bid to become prime minister did better than controls in terms of sales and employment but not of productivity. The results are confirmed when we instrument the decision to support Berlusconi with electoral outcomes in the 1921 elections. We also find suggestive evidence that the supporters’ superior performance is stronger in sectors with high external financial dependence and high advertising intensity.

AB - We study the potential benefits and mechanisms of firms’ political connections by analyzing the Italian experience, where, in the early nineties, Silvio Berlusconi, a rich TV tycoon, became the leader of the conservative political coalition. Using firm-level data, we find that the 101 companies supporting Berlusconi’s successful bid to become prime minister did better than controls in terms of sales and employment but not of productivity. The results are confirmed when we instrument the decision to support Berlusconi with electoral outcomes in the 1921 elections. We also find suggestive evidence that the supporters’ superior performance is stronger in sectors with high external financial dependence and high advertising intensity.

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KW - Productivity

KW - Policy regulation

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KW - Productivity

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BT - Gains from Early Support of a New Political Party

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Leonardi M, Mossucca R, Schivardi F, Severgnini B. Gains from Early Support of a New Political Party. Bonn: IZA. 2019.