Political Risk Insurance: The Role of Lobbying Meetings. (Job Market Paper)
Abstract: The paper studies how the degree of firms' disclosed political risk varies with the intensity of lobbying activities. Beyond the traditional rent-seeking mechanism, lobbying can also overcome information asymmetry between firms and policymakers, enabling them to mitigate political risk exposure. The paper uses the information on lobbying meetings of UK-based publicly listed firms and their disclosed political risk through quarterly conference call reports and shows that lobbying reduces firm-level political risk. However, the effectiveness of lobbying as a risk-mitigating tool depends on the political risk and lobbying type. The largest effect of lobbying on political risk reduction is documented in the case of risk coming from institutions and political processes, tax policy, or environmental policy. The least effect is observed on trade policy uncertainty. The results also show that group lobbying is relatively more effective than individual lobbying as it is associated with better information transfers from policymakers and other meeting participants. Importantly, lobbying at the highest policy level does not contribute much to political risk reduction. However, targeting lobbying activities to specific government positions matters the most, such as the Economic Secretary and Parliamentary under-secretary. Lastly, the value of lobbying is larger during periods of high economic policy uncertainty when the demand for policy information is high.
With a little Help from My Friend: Political Connections and Allocation of COVID-19 Aid.
Abstract: The paper studies the role of political connections in allocating COVID-19 support programs. Using Enterprise Survey (BEEPS) data and the corresponding COVID follow-up survey rounds, covering nearly 12,000 firms from 30 countries, the study shows that firms’ political connection status does not affect the overall propensity to receive government support. However, results are heterogeneous and depend on the program type. Politically connected firms have a higher propensity (3.6 percentage points) to get direct cash transfers than those without such connections; the effect is muted for other programs, such as credit payment deferral, access to new credit, fiscal exemption, and wage subsidy. Political bias in distributing cash transfers was only observed during the first few months of the COVID-19 pandemic when the rules of government programs still needed to be set, and the eligibility criteria were not defined. The paper provides evidence that political bias may also lead to resource misallocation. The results show that the value of political connections is much larger among firms that did not experience any negative shock during the pandemic; political connection compensates firms’ non-eligibility status and allows them to access cash transfers. Lastly, the value of political connections does not vary much and is equally observed in different institutional contexts.
Cambridge Working Papers in Economics (CWPE), available at SSRN
Former politicians in high-level corporate positions: does foreign ownership matter? (with Davide Castellani, Stefano Elia, and Irina Surdu) (R&R at Multinational Business Review)
Abstract: The paper studies the relationship between firms’ political connections and foreign ownership status. Having former politicians in high-level corporate positions is particularly beneficial for foreign-owned firms (MNEs) to access local market knowledge, gain legitimacy, and overcome the liability of outsidership (LoO). Yet, MNEs also face considerable costs and risks when building such political connections. We examine the variation in firms’ political connections based on a comprehensive firm-level dataset of 22,672 firms from 41 countries. The results show that foreign-owned firms are less likely to be politically connected than domestic-owned firms. By integrating LoO and Resource Dependency Theory (RDT), our findings also reveal that the propensity of political connections for foreign firms increases with the degree of dependency on local market conditions. Foreign-owned firms use political connections more when they (1) have higher local market commitment, (2) operate in industries with high informal regulation, or (3) operate in autocratic political systems.
Russia’s Wartime Economy: Measuring Regional Inequalities from Outer Space (with Ketevani Kapanadze, Jan Fidrmuc, Martin Hulényi) (Under Review)
Abstract: We study Russia's February 2022 full-scale invasion of Ukraine as a natural experiment to determine how sudden disruptions to international market access reshape sub-national economic inequalities. Using remotely sensed nighttime lights as a proxy for economic activity, we estimate the spatially heterogeneous economic effects of the war. We find that Russia experienced an overall economic slowdown following the full-scale invasion. Considering sub-national effects, regions in Western and North-Western Russia experience significantly larger economic contractions, while Eastern and Southern border regions exhibit relative improvements in performance. Together, these findings are consistent with sanctions exposure, trade reorientation of activity toward non-Western markets, increased military production, and military recruitment leading to substantial regional realignment of the Russian economy and urban structure.
Lobbying Across Arenas: Frame Congruence in Online and Offline Fossil Fuel Lobbying (with Anne Rasmussen)
Abstract: Amid the growing use of social media by interest groups for lobbying purposes, it is essential to understand how digital advocacy differs from traditional lobbying activities. Yet, we know surprisingly little about how framing strategies vary across online and offline venues, and whether the same organizations adjust their framing when communicating on different platforms. This paper addresses this gap by comparing how organizations frame the same issue across online and offline lobbying settings, holding issue context constant. Focusing on fossil fuel politics at the EU level, we analyze public consultation and feedback documents to capture offline lobbying, and Facebook posts to capture online lobbying, using protest frames as the primary framing typology. The analysis reveals notable differences: offline lobbying emphasizes in-depth discussion and problem identification framing, while online lobbying prioritizes mobilization framing and blame attribution framing. By contrast, prognostic framing (providing solutions) and urgency framing appear similarly across venues. We further find no significant evidence that issue salience or organizational resources drive framing variation across platforms. These findings highlight how online and offline lobbying can serve as complementary arenas, with implications for understanding platform-specific communication and the evolving repertoire of interest group tools.
Draft coming soon!
Employment (In)Security, Labor Market Regulation, and Populist Party Support (with Simon Deakin)
Abstract: While conventional views emphasize employment status as the primary driver of voter insecurities and political choices, this study incorporates labor market regulations into the analysis. Using a panel dataset that includes 393 election outcomes from 51 countries between 1970 and 2024, as well as employment and labor regulation data, the results document the following. First, as employment rises, populist party support typically declines. However, this relationship is moderated by the level of labor protections. In countries with minimal labor protections, high employment alone does not reduce populist support. Instead, lower populist support is seen in countries with both high employment and robust labor rights. Specifically, labor regulations that protect atypical workers (e.g., those on fixed-term or temporary contracts) and regulate dismissal practices are most effective in reducing employment insecurity and, consequently, populist appeal. Other labor regulations, including those addressing working hours, employee representation, and industrial actions, appear to have a less significant impact.
Draft coming soon!
What do populists do once in office? The impact of populist governments on labour and corporate laws (With Simon Deakin), Socio-Economic Review, link