The Value of Political Geography: Evidence from the Redistricting of Firms

46 Pages Posted: 7 Sep 2019

See all articles by Joaquin Artes

Joaquin Artes

Universidad Complutense de Madrid (UCM)

Brian Kelleher Richter

University of Texas at Austin - Red McCombs School of Business

Jeffrey F. Timmons

NYU Abu Dhabi

Date Written: August 29, 2019

Abstract

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

Artes, Joaquin and Richter, Brian Kelleher and Timmons, Jeffrey F., The Value of Political Geography: Evidence from the Redistricting of Firms (August 29, 2019). Available at SSRN: https://ssrn.com/abstract=3447605 or http://dx.doi.org/10.2139/ssrn.3447605

Joaquin Artes

Universidad Complutense de Madrid (UCM) ( email )

Carretera de Humera s/n
Madrid, Madrid 28223
Spain

Brian Kelleher Richter (Contact Author)

University of Texas at Austin - Red McCombs School of Business ( email )

2100 Speedway
B6500, CBA 5.250
Austin, TX 78712
United States
512-232-6751 (Phone)

HOME PAGE: http://briankrichter.com/

Jeffrey F. Timmons

NYU Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates
(971) 262 84523 (Fax)

HOME PAGE: http://https://nyuad.nyu.edu/en/academics/faculty/jeffrey-timmons.html

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