Political Connections Reduce Job Creation: Firm-level Evidence from Lebanon

@article{Diwan2020PoliticalCR,
  title={Political Connections Reduce Job Creation: Firm-level Evidence from Lebanon},
  author={Ishac Diwan and Jamal Ibrahim Haidar},
  journal={The Journal of Development Studies},
  year={2020},
  volume={57},
  pages={1373 - 1396}
}
Abstract Using firm-level data, we document that politically connected firms (PCFs) create more jobs than unconnected firms in Lebanon. We observe, however, that the presence of PCFs in a sector is correlated with lower job creation. Although causality is difficult to establish due to endogeneity issues, we find that PCFs expand, and non-PCFs retract, more around elections. Our findings are consistent with the hypothesis that unfair competition by PCFs hurts unconnected competitors so much that… 

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