The Value of Political Connections in China: Government Official as Independent Directors
Understanding the value of political connections is important for firm decision-making and for policy analysis. I examine this question by estimating the effect of having a politician on the board of directors on a firm’s stock price. A new policy in China (Regulation No.18) forced politicians to resign as directors, providing an exogenous shock to firms’ political connectedness. I create an original data set with the political positions of all independent directors who resigned between 2013 and 2015. A regression discontinuity design reveals no immediate impact after the announcement of the regulation. However, a difference-in-difference design shows that the loss of high level politicians causes a firm’s stock price to fall in the long run. The analysis exploits heterogeneity in both the number and importance of politicians across firms to identify short-run and long-run effects.
How Fundamentalism Takes Root: A Simulation Study
(working paper available on UCSC Department website)
We report agent-based simulations of religiosity dynamics in a spatially dispersed population. Agents’ religiosity responds to neighbors via pairwise interactions as well as via club goods effects. A simulation run is deemed fundamentalist if the final distribution contains a sizable minority of very high religiosity together with a majority of lesser religiosity. Such simulations are more prevalent when parameter values shift from values reflecting traditional societies towards values reflecting the modern world. The simulations suggest that the rise of fundamentalism in the modern world is boosted by greater real income, lower relative prices for secular goods, less substitutability between religious and secular goods, and less time spent with neighbors. Surprisingly, the simulations suggest little role for the rise of long distance communication and transportation.
Education, Income and Intergenerational Persistence: An Evolutionary View
with Hugo Lhuillier. Advisor: Daniel Friedman.