Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212863 
Year of Publication: 
2016
Series/Report no.: 
BOFIT Discussion Papers No. 20/2016
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
We examine how regional-level political influence affects firm financial performance and survival. Combining representative survey data on mid-sized manufacturing firms in Russia with official registry data, we find that politically influential firms exhibit higher profitability and retain larger financial investments than non-influential firms. At the same time, we find no association between regional political influence and access to bank lending. Most importantly, our empirical analysis suggests that the benefits of influence may be transient. Influential firms experienced significantly lower growth during our 2004–2010 sample period than non-influential firms. Moreover, influential firms had a significantly higher probability of going bankrupt after the 2008 global financial crisis than non-influential firms.
JEL: 
D22
D72
G38
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-142-9
Document Type: 
Working Paper

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