Featured paper · 2023
Connecting to Power: Political Connections, Innovation, and Firm Dynamics
What political connections do to firm-level innovation in Italy. Connected firms hire more, grow faster, and innovate less. The paper identifies the mechanism using Italian patent records and firm-politician matching: connections substitute for innovation rather than complement it.
Ufuk Akcigit, Salomé Baslandze, Francesca Lotti. Econometrica, 2023.
The policy line
Where political access can be substituted for productivity, expect both more political activity and less productivity. Pillar 01 of the Academy's diagnostic begins here.
Summary
What political connections do to firm-level innovation in Italy. Connected firms hire more, grow faster, and innovate less. The paper identifies the mechanism using Italian patent records and firm-politician matching: connections substitute for innovation rather than complement it.
The Academy uses this paper as a primary text across its five pillars. The full text is available at the publisher.
