Political Ideology and Corporate Innovation: Evidence from the Expansion of a Local TV Network

Abstract

We examine whether political ideology affects corporate innovation using the staggered expansion of the largest conservative media network in the U.S., Sinclair Broadcasting Group. Upon Sinclair entry into a TV market, the local firms' innovation output falls. The quality of new patents as measured by the number of their citations, originality, and market-based economic value deteriorates significantly. The effect is predominantly driven by the departure of innovative talent from affected firms. Consistent with this mechanism, we find larger effects in states with higher human capital mobility, measured by weaker state-wide enforceability of non-competition laws.

Keywords: media influence, political ideology, innovation, human capital mobility

JEL Classification: D72, J24, L82, J61, O31