Political Connections and Trade Expansion

24 Pages Posted: 16 Mar 2011

See all articles by Yi Lu

Yi Lu

National University of Singapore (NUS) - Department of Economics

Abstract

This article, using a 2004 survey of Chinese private firms, empirically studies the impact of political connections (indicated by being a deputy to the Chinese People's Congress) on trade expansion. It is found that political connections lead to an increase of trade expansion. Meanwhile, the expansion into other administrative areas requires a high hierarchical level of political connections, at the corresponding administrative level or above. Furthermore, it is found that political connections affect trade expansion by overcoming insecure property rights institutions and inefficient contracting institutions.

Keywords: Political connections, trade expansion, economic institutions, Chinese People's Congress

JEL Classification: P26, D21, F18

Suggested Citation

Lu, Yi, Political Connections and Trade Expansion. Economics of Transition, Vol. 19, No. 2, pp. 231-254, 2011, Available at SSRN: https://ssrn.com/abstract=1787865 or http://dx.doi.org/10.1111/j.1468-0351.2010.00402.x

Yi Lu (Contact Author)

National University of Singapore (NUS) - Department of Economics ( email )

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