Publication Type

Working Paper

Version

publishedVersion

Publication Date

12-2019

Abstract

We provide firm-level evidence on how politicians’ ideologies affect economic outcomes and financial development by exploring a unique setting of ideological discontinuity in China from Maoism to Dengism around 1978. We find the ideological exposure during a politician’s early adulthood has an enduring effect on contemporary firm and city policies. Firms governed by “Mao’s mayors” have more stakeholder spending, lower pay inequality, and less internationalization than those governed by Deng’s. Further evidence suggests politicians’ ideology may affect economic activities through channels other than economic policy. Selection bias, endogenous matching and mayor age effect are unlikely to drive our results.

Keywords

Ideology, Politician, Corporate Policy, China

Discipline

Econometrics | Finance

Research Areas

Econometrics

First Page

1

Last Page

68

Publisher

SSRN

Additional URL

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3494916

Share

COinS