Political Connections Reduce Job Creation: Firm-level Evidence from Lebanon
Second Author's Department
Find in your Library
Journal of Development Studies
Using firm-level data, we document that politically connected firms (PCFs) create more jobs than unconnected firms in Lebanon. We observe, however, that the presence of PCFs in a sector is correlated with lower job creation. Although causality is difficult to establish due to endogeneity issues, we find that PCFs expand, and non-PCFs retract, more around elections. Our findings are consistent with the hypothesis that unfair competition by PCFs hurts unconnected competitors so much that aggregate employment growth in the sector is affected negatively.
(2021). Political Connections Reduce Job Creation: Firm-level Evidence from Lebanon. Journal of Development Studies, 57(8), 1373–1396.
Diwan, Ishac, et al.
"Political Connections Reduce Job Creation: Firm-level Evidence from Lebanon." Journal of Development Studies, vol. 57,no. 8, 2021, pp. 1373–1396.