Do Powerful Politicians Really Cause Corporate Downsizing?
8 Pages Posted: 5 Sep 2014 Last revised: 21 Oct 2015
Date Written: October 20, 2015
Cohen, Coval, and Malloy (2011) suggest that increased government spending crowded out private corporate investment by publicly-traded corporations, as identified by changes in Congressional chairmanships. Yet, the same inference would obtain in a placebo that begins years earlier, the capital-expenditure decline was primarily a 1987-92 Texas effect (following a 1980-86 oil price decline), and the standard errors were not clustered by state.
Keywords: Earmarks, Investment
JEL Classification: E13, E62, G31
Suggested Citation: Suggested Citation