Empirical analyses on the effects of politics on corporate performance and behavior

2018 Fiscal Year Final Research Report

• Project/Area Number: 26380324
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Economic policy
• Research Institution: Nihon University
• Principal Investigator: Sawada Michiru 日本大学, 経済学部, 教授 (10410672)
• Co-Investigator(Kenkyū-buntansha): 権 赫旭 日本大学, 経済学部, 教授 (80361856) ; 坂井 功治 京都産業大学, 経済学部, 准教授 (80548305)
• Project Period (FY): 2014-04-01 – 2019-03-31
• Keywords: 政治的要因 / 企業行動 / パフォーマンス

Outline of Final Research Achievements

This study explores the extent of political connections of firms, and examines the implications for firm values, using firm-level data from prewar Japan. We collect data from publicly traded companies in Japan in the late 1920s and early 1930s, regarding their directors and presence of members of the House of Representatives, stock prices, and financial performance. We find that almost 20% of these publicly traded companies had political connections through politician directors. In particular, firms in the regulated industries, including the electrical utilityies and the railroad industries, were more likely to have political connections. Regression analyses reveal that the stock returns of firms with newly- obtained political connections improved from the pre-election to post-election periods. Furthermore, this positive effect accrued to non-regulated industries, while it did not to regulated industries.

Free Research Field

金融論、政治経済学

Academic Significance and Societal Importance of the Research Achievements

政治的要因が日本経済に与える影響を分析した研究の多くが、マクロデータなどの集計データを用いて政治的要因と経済変数の関係性を検証するものであったのに対し、本研究では、詳細なミクロデータを用いて政治的要因が企業行動や企業のパフォーマンスに与える影響を分析したことが学術的にも意義があると考えられる。特に、これまで集計データでは見出すことができなかった政治的要因が実体経済に影響する様々な経路をより明示的に検証することができ、いくつかの政策的な含意を導くことができるという点で社会的にも少なからず意義があると考えられる。