Former Officials and Subsidies to State-owned Enterprises
AbstractFormer officials in business are often blamed for abusing their connections to the government to distort public policy to their advantage. This paper examines the extent of rents to former officials by analyzing subsidy allocation among state-owned enterprises in Korea. Defining connected CEOs as former members of the National Assembly or government officials, I have estimated the effects of connected CEOs on attracting government subsidies. Substantial replacement of CEOs after the change of political leadership, a unique feature of state-owned enterprises of Korea, helps cleaner identification than other related studies relying only on cross-sectional variations. The empirical evidence is consistent with a hypothesis that connected CEOs are more likely than others to attract state subsidy. This relationship seems stronger in case of CEOs from the relevant offices and weaker when the competing recipients have strong connections. Given the data limitation, however, part of the estimated effects may come from expertise rather than connections especially for former bureaucrats.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.
Volume (Year): 36 (2011)
Issue (Month): 2 (June)
State-owned Enterprise; Subsidies; Political Connection;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Yoshiro Miwa & J. Mark Ramseyer, 2002.
"Who Appoints Them, What Do they Do? Evidence on Outside Directors from Japan,"
CIRJE-F-159, CIRJE, Faculty of Economics, University of Tokyo.
- Yoshiro Miwa & J. Mark Ramseyer, 2005. "Who Appoints Them, What Do They Do? Evidence on Outside Directors from Japan," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 299-337, 06.
- Jinyoung Hwang, 2002. "A Note On The Relationship Between Corruption And Government Revenue," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 27(2), pages 161-177, December.
- ,, 2009. "Economics of Monetary Union," OUP Catalogue, Oxford University Press, edition 8, number 9780199563234.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Changhui Kang).
If references are entirely missing, you can add them using this form.