The RFBerlin Applied Economics Seminar series brings leading researchers to Berlin to share their latest work and engage with our community. We are pleased to welcome Andrea Weber (Central European University) for this session, where he will share her work.
Andrea Weber is Professor of Economics at the Central European University, Project Leader at RFBerlin and serves as co-editor at the Journal of the European Economic Association. She is also Fellow of the Econometric Society, Research Fellow at CESifo and a Corresponding Member of the Austrian Academy of Sciences. Her research focuses on the role of institutions and labor market policies on labor supply decisions, the role of firms in the labor market, policies to reduce gender differences, and the effects of migration and economic shocks on individual careers.
Event Topic:
Do Politicians Affect Firm Outcomes? Evidence from Connections to the German Federal Parliament
with André Diegmann and Laura Pohlan
Do firms benefit from political connections and to what extent do connections between firms and politicians shape business dynamics? This paper combines data on political candidates in elections to the German Bundestag over the last two decades and the universe of German firms. We exploit detailed regional information on party list placements in national elections and compare candidates who just won and just lost a seat in parliament. Linking successful and non-successful political candidates to firms, we show that connecting to political power decreases market exit and positively impacts firm-level employment growth. These effects are stronger if the politician’s party is represented in the government as compared to opposition parties. We further show that the effects of political connections can be explained by an increase in public procurement contracts, economic subsidies and access to credit. We identify two important types of connections: connections to politicians with and without entrepreneurial capital which influence firm-level outcomes in different ways. While the effect on exits is driven by entrepreneurial politicians, connections to politicians without entrepreneurial capital explain the employment responses. Consistent with the view that firms seek preferential treatments and shy away from competition, firm-level productivity dynamics deteriorate and business dynamics in locally defined markets decrease due to political connections, which suggests a significant impact of the interactions between firms and politicians on the economy.
Event Details:
Date: 21 October 2025
Time: 14:00–15:15
Participation: the seminar is open to the public and targeted to an academic audience.
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