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
Citation
LIANG, Hao; WANG, Rong; and ZHU, Haikun.
Finance and ideology: The firm-level channels. (2019). 1-68.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7124
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3494916