Chapter 1. In the 1970s, competition policy in the United States banking sector changed from exempting competition to liberalization and deregulation. Competition not only plays an important role in allocational efficiency but it is also essential for long-term economic growth. This chapter develops a model of banking contributions to evaluate to what extent banks affect the level of competition in the banking sector, and tests the model's predictions using a novel detailed dataset which includes all contributions made by banks from 1993 to 2010 in the United States. Controlling for banks' characteristics, the results are consistent with the model's predictions and show show that a higher level of contributions increases the Lerner index (as a measure of competition) or in the other words, decreases the level of competition. Chapter 2. This chapter provides the first empirical evidence that market structure affects the electoral power of firms as special interest groups. Firms not only affect the election outcomes by making contributions to their preferred candidates, they also enforce social norms among their members by encouraging them to vote for the candidate with the most closely-aligned interests. This chapter uses a linear probability model to analyze 574 open-seat races for the House of Representatives in the United States between 1990 and 2014. The results show that, even when controlling for the total value of contributions made to a candidate, political donations made by firms with high market power have a positive effect on the candidates' probability of winning. The findings are consistent with the idea from collective action theory that concentrated industries are more likely to behave as an organized interest group to advance their interests. Chapter 3. Ethnic heterogeneity is an important factor in the formation of human sexual network and the prevalence of STDs. Racial and ethnic ties create closed social networks with rigid in-group boundaries and hampers the intra-group dissemination of information. Slow information flow among groups facilitates the spread of STDs by encouraging individuals to ethnically diversify their sexual partners in order to lower the chance of getting caught cheating. Analyzing a cross-province sample of 39,830 sexually active adults driven from the 2013-2014 Canadian Community Health Survey, we find that individuals who live in a highly ethnically diversified neighbourhood are more susceptible to STDs compared to ones who live in a ethnically homogenous neighbourhood. Evidence from several robustness checks suggests that the relationship is causal.

There is a great deal of work on campaign finance at the national level, however, state level research is sparse. My dissertation fills this void in the literature by examining the motivations of contributors to state legislators. The literature discusses two major motivations of contributors universalistic contributors, who hope to influence election outcomes, and particularistic contributors who hope to influence legislative votes. The primary hypothesis is that proximity to the general election is the primary factor in explaining contribution patterns in state legislatures; however, proximity to a legislative vote of interest to the contributor will also be significant in explaining contribution patterns. Additionally, the dissertation examines the impact of session limits on contribution patterns. I use campaign contribution data collected by the National Institute on Money in State Politics and select twenty-five bills in nine states to test the primary hypothesis. I use a contributor fixed effects model to test for increased or decreased levels of contributions for each contributor, given the proximity to the election and legislative votes important to the contributor. The results indicate that contributions increase across all states in the two months prior to the general and primary elections, and that proximity to the election is the most important factor in explaining campaign contributions in state legislatures. In 32% of all cases in the study, there was direct evidence of interest groups attempting to influence the outcome of legislative votes. Additionally, an increase in contributions close to a major legislative vote occurred in 77% of the cases without session limits, indicating that interest groups are highly active in attempting to influence policy outcomes. An additional examination of contribution patterns indicates that PACs shift their contributions to the beginning of the legislative session when faced with session limits. My research contributes to our understanding of the motives of campaign contributors and their actions when faced with legal restrictions on their contributions. This research, therefore, allows campaign finance reformers to make better reform decisions.

Este trabalho visa identificar possíveis vantagens que as empresas obtêm ao contribuir com campanhas políticas. Para isso, foi utilizada uma extensa base de dados com informações de doações a candidatos aos cargos de deputado, senador e presidente nas eleições de 2006 e 2010. As variáveis de interesse analisadas foram o retorno anormal cumulativo à época da divulgação do resultado das eleições e o retorno sobre o patrimônio líquido no ano posterior a cada eleição. Foram estimadas regressões de dados em painel através de mínimos quadrados ordinários, e incluídos efeitos fixos de ano e setor das empresas. Os resultados indicam que não apenas o mercado antecipa benefícios futuros para as empresas que contribuíram com campanhas – o que se reflete em retornos anormais cumulativos positivos à época da eleição – mas também estas empresas apresentam retornos sobre o patrimônio líquido superiores aos daquelas que não participaram do processo político. Além disso, doações a candidatos vencedores geram retorno superior aos de doações a candidatos perdedores; o que vai ao encontro da hipótese de retribuição de favores. De forma similar, contribuições a candidatos filiados à coligação do presidente eleito também apresentaram impacto superior quando comparadas com doações a candidatos da oposição. / This paper aims to identify potential benefits that companies obtain by contributing to political campaigns. We used an extensive database with information on donations to House, Senate and Presidency candidates in the 2006 and 2010 elections. The variables of interest analyzed were the cumulative abnormal return by the time the results of each election became know and the return on equity in the year following the election. Panel regressions were estimated as ordinary least squares (OLS), and fixed effects of year and industry were included. The results indicate that not only the market anticipates future benefits for companies that contributed to campaigns - which is reflected in positive cumulative abnormal returns at the announcement of the election results - but these companies also have higher returns on equity than those that were not involved in the political process. In addition, donations to winning candidates generate higher returns than donations to losing candidates; which supports the return of favors hypothesis. Similarly, contributions to candidates affiliated to the president’s coalition's also had higher impact when compared to donations to the oposition candidates.

This dissertation studies social incentives in pro-social behavior and its various implications, including but not limited to disclosure policies, fundraising strategies and geographic polarization. / Economics

Este trabalho visa identificar possíveis vantagens que as empresas obtêm ao contribuir com campanhas políticas. Para isso, foi utilizada uma extensa base de dados com informações de doações a candidatos aos cargos de deputado, senador e presidente nas eleições de 2006 e 2010. As variáveis de interesse analisadas foram o retorno anormal cumulativo à época da divulgação do resultado das eleições e o retorno sobre o patrimônio líquido no ano posterior a cada eleição. Foram estimadas regressões de dados em painel através de mínimos quadrados ordinários, e incluídos efeitos fixos de ano e setor das empresas. Os resultados indicam que não apenas o mercado antecipa benefícios futuros para as empresas que contribuíram com campanhas – o que se reflete em retornos anormais cumulativos positivos à época da eleição – mas também estas empresas apresentam retornos sobre o patrimônio líquido superiores aos daquelas que não participaram do processo político. Além disso, doações a candidatos vencedores geram retorno superior aos de doações a candidatos perdedores; o que vai ao encontro da hipótese de retribuição de favores. De forma similar, contribuições a candidatos filiados à coligação do presidente eleito também apresentaram impacto superior quando comparadas com doações a candidatos da oposição. / This paper aims to identify potential benefits that companies obtain by contributing to political campaigns. We used an extensive database with information on donations to House, Senate and Presidency candidates in the 2006 and 2010 elections. The variables of interest analyzed were the cumulative abnormal return by the time the results of each election became know and the return on equity in the year following the election. Panel regressions were estimated as ordinary least squares (OLS), and fixed effects of year and industry were included. The results indicate that not only the market anticipates future benefits for companies that contributed to campaigns - which is reflected in positive cumulative abnormal returns at the announcement of the election results - but these companies also have higher returns on equity than those that were not involved in the political process. In addition, donations to winning candidates generate higher returns than donations to losing candidates; which supports the return of favors hypothesis. Similarly, contributions to candidates affiliated to the president’s coalition's also had higher impact when compared to donations to the oposition candidates.

Este trabalho visa identificar possíveis vantagens que as empresas obtêm ao contribuir com campanhas políticas. Para isso, foi utilizada uma extensa base de dados com informações de doações a candidatos aos cargos de deputado, senador e presidente nas eleições de 2006 e 2010. As variáveis de interesse analisadas foram o retorno anormal cumulativo à época da divulgação do resultado das eleições e o retorno sobre o patrimônio líquido no ano posterior a cada eleição. Foram estimadas regressões de dados em painel através de mínimos quadrados ordinários, e incluídos efeitos fixos de ano e setor das empresas. Os resultados indicam que não apenas o mercado antecipa benefícios futuros para as empresas que contribuíram com campanhas – o que se reflete em retornos anormais cumulativos positivos à época da eleição – mas também estas empresas apresentam retornos sobre o patrimônio líquido superiores aos daquelas que não participaram do processo político. Além disso, doações a candidatos vencedores geram retorno superior aos de doações a candidatos perdedores; o que vai ao encontro da hipótese de retribuição de favores. De forma similar, contribuições a candidatos filiados à coligação do presidente eleito também apresentaram impacto superior quando comparadas com doações a candidatos da oposição. / This paper aims to identify potential benefits that companies obtain by contributing to political campaigns. We used an extensive database with information on donations to House, Senate and Presidency candidates in the 2006 and 2010 elections. The variables of interest analyzed were the cumulative abnormal return by the time the results of each election became know and the return on equity in the year following the election. Panel regressions were estimated as ordinary least squares (OLS), and fixed effects of year and industry were included. The results indicate that not only the market anticipates future benefits for companies that contributed to campaigns - which is reflected in positive cumulative abnormal returns at the announcement of the election results - but these companies also have higher returns on equity than those that were not involved in the political process. In addition, donations to winning candidates generate higher returns than donations to losing candidates; which supports the return of favors hypothesis. Similarly, contributions to candidates affiliated to the president’s coalition's also had higher impact when compared to donations to the oposition candidates.

The first chapter explores the extent to which campaign contributions to politicians in the financial sector can influence the economic performance of the banks. In this paper, I study the relationship between campaign contribution, probability of failure and portfolio investment. I find that there is a significant effect of campaign contributions on the probability of failure and riskier investment portfolio using U.S. state banks. This effect is more pronounced for smaller and less geographically diversified banks. The results are robust for the overall risk taking measure ($Z-score$ and volatility of the return). The result is also robust using the magnitude of contributions. Using bivariate model and Blundell-Bond estimate to control for endogeneity of campaign contributions, I find that the results are robust. Using US legislative data on congressmen from congress.gov, the second chapter (co-authored with Aggey Semenov) investigates the effect of U.S. Congress legislators' non roll--call activity in bill sponsorship and co--sponsorship on campaign contributions from the financial industry. We found that bill sponsorship has positive and significant effect on campaign contributions in both Chambers. Co--sponsorship has positive and significant effect on contributions in the House but not in the Senate. We link this observation to a longer term of senators compare to congressmen; senators have more time to engage in more profitable sponsorship than congressmen. Legislators' efficiency in promoting bills to laws is rewarded by the financial industry. We also conduct robustness checks. Motivated by a large literature on the determinants of Foreign Direct Investment (FDI), the third chapter (co-authored with Roland Pongou) is assigned to understand whether a leader's longevity in office promotes FDI inflows? We answer this question with a novel dataset on the personal characteristics of African leaders covering the period from 1960 to 2011. We find that political longevity increases FDI inflows. The effect is robust to controlling for leader heterogeneity using leader fixed effects. The results remain unchanged when using plausible instrumental variables for political longevity to address possible endogeneity issues, and when estimating a dynamic model. Importantly, the effect of longevity on FDI inflows is only positive for more democratic regimes. Exploring the mechanism, we find that longevity of leaders improves the rule of laws, bureaucracy, property rights, and infrastructure, and reduces corruption. We also find that unobserved characteristics of leaders such as his ability play a role in its longevity and the improvement of institutions.

This dissertation consists of three essays in which I study the political economy of trade agreements. Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, I systematically explore the role played by both the winners and the losers of globalization. The first chapter focuses on the winners, large multinational firms lobbying in favor of the ratification of free trade agreements. The second chapter looks at these winners when they lose, studying the impact of the non-ratification of a trade agreement on their profits. The last chapter focuses on labor interests and trade unions, the losers of globlalization.The first chapter (joint with Paola Conconi and Mathieu Parenti) is focused on firms. We show that the political economy of free trade agreements (FTAs) is dominated by large firms engaged in international trade that support the ratification of these agreements. We develop a model of endogenous lobbying on FTAs by heterogeneous firms, which can explain why only large pro-FTA firms select into lobbying. The model also delivers predictions on the intensive margin of lobbying. In line with these predictions, we find that larger firms spend more supporting a given FTA, and individual firms spend more supporting FTAs that generate larger gains – i.e. larger improvements in access to foreign consumers and suppliers and smaller increases in domestic competition – and that are more likely to be opposed by politicians.The second chapter (joint with Moritz Hennicke) is an event study on the 2016 U.S. presidential election, and the subsequent shock to U.S. trade policy – the non-ratification of the Trans-Pacific Partnership (TPP). We provide empirical evidence that corporate lobbying on trade agreements matters for corporate profits. We find that stock prices of companies that lobbied in favor of the TPP underperformed following Trump’s election. On the intensive margin, we find a strong and positive relationship between the amount spent in lobbying and the cumulative losses of lobbying firms. Finally, by comparing the original TPP agreement with its newer version (CPTPP), without U.S. participation, we provide evidence that firms’ lobbying activity was related to having some specific provisions included in the agreement. In the third chapter, I focus on the role played by trade unions, studying both their lobbying expenditures and their campaign contributions to politicians. I first show that unions are the main opposing force to the ratification of FTAs, and that larger unions, operating in tradable sectors, are more likely to lobby against FTAs. I then study union’s PAC contributions to political parties. During the last three decades, more than 90% of unions’ PAC contributions were directed to Democratic candidates. This has drastically changed when the Republican party took a more protectionist stance under Trump. I find that unions that lobbied against the ratification of FTAs started contributing more to Republican congressmen, particularly those who have taken an anti-trade stance. / Doctorat en Sciences économiques et de gestion / info:eu-repo/semantics/nonPublished

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