gretha logoFelipe Starosta de Waldemar has recently presented his paper “On the Economic Consequences of Political Turnover: Evidence from Mozambican Firms”, co-authored with Patrick Domingues, at the 6th GREThA Conference in Bordeaux, on June 16th and 17th 2016.
This paper investigates the impact of regional political turnover on firm performance. We combine an original Mozambican database on election results with a national geo-localized firm survey and we perform a difference-in-difference analysis. Our empirical strategy relies on the comparison between treated provinces (those where the wining party changed between two different elections) and control provinces (where the winning party remained the same). Results show that firms facing political turnover performed significantly less after the electoral shock. This find suggests that in a context of weak political and economic environments, political instability is a binding constraint for economic growth.