Politicians at Work: The Private Returns and Social Costs of Political Connections

Family Firms and Investments

“…These findings, even if obviously deserving further analysis, are in line with other results on the determinants of the size of Italian companies (Cingano, Pinotti, 2009) and suggest that the reasons for the prevalence of this model might be searched also in long standing characteristics of Italian institutions (and their inefficiency).…”

Financial Sector Regulation and the Revolving Door in US Commercial Banks

“…In a similar vein, Cingano and Pinotti (2013) show that corporate appointments of local Italian politicians shift public demand toward connected firms, especially in high public expenditure and high corruption provinces, and that this shift reduces public good provision by 20%.…”

“…In emerging and industrialized economies, where relationships linked to kinship, friendship, or ethnicity have been progressively replaced by market-based relationships in economic exchanges (Rajan and Zingales 1998;Andvig 2006), the revolving door is a major source of political connections with significant positive effects on firms' value (Faccio 2006;Cingano and Pinotti 2013;Kramarz and Thesmar 2013;Goldman et al 2013;Luechinger and Moser 2014).…”

“…On the theoretical side, the expected effects of the revolving door on firms' value can be derived from the theoretical rent-seeking models emphasizing the allocation of talents between productive activities and unproductive rent-seeking activities (Murphy et al, 1991;Cingano and Pinotti, 2013). This literature focuses mainly on the movement from the public sector towards the private one, and stresses that the revolving door may increase firm's performances via two competing channels:…”

Corruption in Procurement and the Political Cycle in Tunneling: Evidence from Financial Transactions Data

“…Our work is particularly related to the recent strand of this literature, which provides empirical estimates of social costs of political connections and shows that political connections, in part, determine the allocation of government procurement contracts, (e.g., Cingano and Pinotti 2013;Amore and Bennedsen 2013;Goldman, Rocholl, and So 2013). 1 We also contribute to the empirical literature that attempts to provide systematic evidence of corruption using objective rather than perception-based measures (e.g., Di Tella and Schargrodsky 2003;Reinikka and Svensson 2004;Bertrand et al 2007a;Olken 2007;Fisman and Miguel 2007;Butler, Fauver, and Mortal 2009;Caselli and Michaels 2009;Cheung, Rau, and Stouraitis 2011;Ferraz and Finan 2011).…”