IDEAS home Printed from https://ideas.repec.org/a/cup/pscirm/v11y2023i1p18-33_2.html
   My bibliography  Save this article

Stimulated political decisions: local leadership turnover and firm subsidies in China

Author

Listed:
  • Hou, Yue
  • Li, Siyao

Abstract

How do politicians distribute government resources in regimes with no electoral considerations? We propose that new politicians minimize political risks by favoring politically important actors: state-owned enterprises (SOEs), but they adjust their behavior as they establish personal ties with private businesses. Using firm-level subsidies data after the 2008 stimulus in China, we find that new provincial governors, immediately after taking office, distribute a significantly larger proportion of subsidies to SOEs relative to private firms. The effect attenuates as new governors learn about local conditions and establish connections with private firms. We find suggestive evidence that governors who adopt such a strategy are more likely to be promoted. Contrary to conventional wisdom that the state always favors state-owned firms, we show that SOEs benefit from the stimulus package only in the short-run.

Suggested Citation

  • Hou, Yue & Li, Siyao, 2023. "Stimulated political decisions: local leadership turnover and firm subsidies in China," Political Science Research and Methods, Cambridge University Press, vol. 11(1), pages 18-33, January.
    • Handle: RePEc:cup:pscirm:v:11:y:2023:i:1:p:18-33_2
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S2049847022000528/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:pscirm:v:11:y:2023:i:1:p:18-33_2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/ram .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.