The Value of Political Geography: Evidence from the Redistricting of Firms
46 Pages Posted: 7 Sep 2019
Date Written: August 29, 2019
We demonstrate that political geography has value to firms. We do so by exploiting shocks to political maps that occur around redistricting cycles in the United States. These keep some firms in Congressional districts that are largely unchanged at one extreme and reassign other firms to entirely new sets of constituents at the other extreme. Our main finding is that firms suffer from being reassigned into districts that are competitive across parties relative to safer districts. The effects are not trivial in magnitude. Moreover, they do not depend on whether firm retain the same politician or actively make campaign contributions.
Keywords: Political Geography, Redistricting, Capture Theory, Representation
JEL Classification: D72, L51
Suggested Citation: Suggested Citation