Governing, Entrepreneurship, and Innovation
Saturday, Jan. 4, 2020 10:15 AM - 12:15 PM (PDT)
- Chair: Barbara M. Fraumeni, Central University of Finance and Economics and NBER
Corruption, Government Subsidies, and Innovation: Evidence from China
AbstractGovernment subsidies account for 22% of Chinese firms’ R&D expenditures. We exploit the staggered removal of provincial heads on corruption charges during China’s anti-corruption campaign and the routine departures of local government officials responsible for innovation programs as two separate types of events that lead to plausibly exogenous reductions in corruption. We document that subsidies became significantly more strongly associated with future innovation after both types of events. Meanwhile, the allocation of subsidies became more sensitive to firm merit and less to corruption. Our results indicate that reducing the impact of corruption improves the allocational efficiency of government subsidies.
Women in power: Female city leaders and regional economic development in China
AbstractThis paper investigates whether female leadership leads to significantly different outcomes in terms of economic development, financial leverage, sectional employment, and social issues. By using data mining and machine learning text analysis algorithm, we collect 994 Chinese prefectural city party secretaries’ resume data and their 270,202 news reports with 281 prefectural cities economy data from 2006 to 2016. We find that cities governed by female municipal secretaries are associated with weaker economic performance in terms of GDP growth rate, fixed asset investment as well as real estate growth. Female leaders tended to undertake significantly less leverage, indicated by less loan, lower loan-deposit ratio and lower employment growth in the finance industry. However, female leadership appears to promote employment in the culture and education industries, and improve the medical facility, education, and environmental protection during their jurisdiction. The text analysis of municipal secretary’s news provides direct evidence of female municipal secretary’s personal characteristics of greater compassionate, higher environmental awareness, lower aggressiveness, and higher reliability. The results remain robust after a series of endogenous and alternative hypotheses tests. Our study sheds a light on the potential inception of behavioral regional economics, and prominently improves the text analysis algorithm by identifying the people’s actions and wills.
Minority Representation in Local Government
AbstractDoes minority representation in a legislative body differentially impact outcomes for minorities? To examine this question, we assemble a novel dataset identifying the ethnicity of over 3,500 California city council candidates and study close elections between white and nonwhite candidates. We find that narrowly elected nonwhite candidates generate differential gains in housing prices in majority nonwhite neighborhoods. This result, which is not explained by correlations between candidate race and political affiliation or neighborhood racial composition and income, suggests that increased representation may help reduce racial disparities. Consistent with a causal interpretation, results strengthen with increased city-level segregation and council-member pivotality. Observed changes in business patterns and policing underpin our results.
- H0 - General
- L0 - General