Economic Benefits and Political Risks: Effects of Land Price Manipulation in China
Qing Chang (University of Pittsburgh)

Abstract : Using China's land market data during 2012-2013, I document evidence of corruption and its effects on politicians and politically connected firms. I find that firms that have locality-specific political ties paid on average 30% less than firms without such ties. Detailed investigations show that firms' political patrons manage to reduce prices by lowering land reserve prices and restricting competitors during the land auction period. Meanwhile, I find that political patrons' level of corruption has an inverted U-shaped relationship with their promotion incentive, and has a U-shaped relationship with their tenure at current positions. Finally, I conduct an event study to show that politically connected firms experienced an overall 18% abnormal negative returns when their political patrons were disciplined during the current anti-corruption campaign.

Politically Connected Firms in the Philippines
Marianne N. Juco (University of the Philippines)

Abstract : The paper explores the extent of family relations between businesses and government in the Philippines and provides the quantitative evidence for the rich anecdotal literature on Philippine politicians and their firms. The paper makes use of a unique dataset which combines financial data and ownership information of Philippine corporations with the names of incumbent government officials, and is first at systematically analyzing such data for the country. The study finds that around 20 percent of Philippine corporations are connected to incumbent politicians. The study employs Mahalanobis matching, using a Kernel method, to show that politically connected firms benefit from connections by gaining larger revenues, higher profitability, and acquiring more debt. Specifically, politically connected firms whose owners start from business first and enter politics later on were found to have higher revenues and profitability, meanwhile, connected firms whose owners started in politics first and established businesses later on acquired higher debt. Further, firms whose owners are connected to the losing candidate exhibited lower debt.

The Preservation of Economic and Political Elites in Times of Transition: Evidence from Russia
Koen Schoors (UGent)
Tom Eeckhout (UGent)

Abstract : In this paper we pose the question to what extent economic and political elites persisted after the fall of the Soviet Union. In the literature arguments have been made both in favour of continuity of elites and in favour of their replacement. The argument for continuity has been based on the importance of old “nomenklatura” social capital for economic success during the early nineties, when the assets of Russia were privatised often to the benefit of the best connected economic agents and specific groups could get access to various types of special treatment by the government. But there have also been strong arguments in support of more than normal elite replacement, that would be driven by the massive socio-economic shock of transition and the ensuing "Putin shock", where many of the elites were again replaced after Putin's ascent to power in 2000. We study this question using very large datasets covering tens of millions of individuals. Using surname analysis methods inspired by Gregory Clark’s work and employing innovative measures of eliteness, we find that the Soviet elites of 40-ies strongly persisted until the late eighties and that both of these cohorts of elites survived relatively well not only the shock of transition, but also the Putin shock. The old Soviet elites, that is, have managed to reproduce themselves surprisingly well throughout transition.