We examine the association between CEOs’ political ideologies, proxied by CEOs’ federal-level personal political contributions to the Republican Party relative to the Democratic Party, and audit fees of the firms that the CEOs manage. We hypothesize and find that firms run by CEOs whose political ideologies are aligned with the Republican Party pay lower audit fees than firms run by CEOs whose political ideologies are aligned with the Democratic Party. This finding is robust to various sensitivity checks and to controls for potential endogeneity and self-selection concerns. In addition, we find that CEO political ideology affects audit risk as proxied by financial reporting quality and client business risk, which, in turn, influence audit fees, suggesting that financial reporting quality and client business risk are two channels through which CEO political ideology affects audit fees. Finally, we find that the association between CEO political ideology and audit fees is more pronounced when corporate governance is weaker. Overall, our results suggest that CEO political ideology is a factor that influences audit risk and auditors incorporate such a factor in their audit pricing decisions.
{"title":"CEO Political Ideology and Audit Pricing","authors":"Wang Dong, Shuo Li, Hong Xie, Yu Zhang","doi":"10.2139/ssrn.3246551","DOIUrl":"https://doi.org/10.2139/ssrn.3246551","url":null,"abstract":"We examine the association between CEOs’ political ideologies, proxied by CEOs’ federal-level personal political contributions to the Republican Party relative to the Democratic Party, and audit fees of the firms that the CEOs manage. We hypothesize and find that firms run by CEOs whose political ideologies are aligned with the Republican Party pay lower audit fees than firms run by CEOs whose political ideologies are aligned with the Democratic Party. This finding is robust to various sensitivity checks and to controls for potential endogeneity and self-selection concerns. In addition, we find that CEO political ideology affects audit risk as proxied by financial reporting quality and client business risk, which, in turn, influence audit fees, suggesting that financial reporting quality and client business risk are two channels through which CEO political ideology affects audit fees. Finally, we find that the association between CEO political ideology and audit fees is more pronounced when corporate governance is weaker. Overall, our results suggest that CEO political ideology is a factor that influences audit risk and auditors incorporate such a factor in their audit pricing decisions.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"208 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114371385","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The district-level political implications of trade competition are mitigated by the strategic behavior of incumbent legislators and the constraints placed upon them by party affiliation. In this paper, we examine the partisan difference in congressional communication strategies on China and trade related issues. We find that, even though Chinese import competition impacted both Republican- and Democrat-held districts, Republican politicians engage in more protectionist and anti-China rhetoric and policy proposals. Using press release data from members of Congress, we show that, among districts more exposed to Chinese imports, Republicans are more likely to blame China as the problem. But there is no difference between Republican and Democratic messaging on trade issues in general. We attribute this partisan shift in political communication strategy to the fact that Republican legislators are more constrained by their party platform from advocating for trade protectionism and social welfare relative to Democrats. Blaming the negative externalities of import competition on China rather than on trade policy has allowed Republican incumbents to continue to support their party’s free trade platform without alienating their constituents. This explains why candidate Trump’s protectionist message linking China and trade resonated with the Republican base much more so than proposals that were better grounded in economic realities.
{"title":"The Partisan Divide in U.S. Congressional Communications After the China Shock","authors":"John Kuk, Deborah Seligsohn, Jiakun Jack Zhang","doi":"10.2139/ssrn.3218738","DOIUrl":"https://doi.org/10.2139/ssrn.3218738","url":null,"abstract":"The district-level political implications of trade competition are mitigated by the strategic behavior of incumbent legislators and the constraints placed upon them by party affiliation. In this paper, we examine the partisan difference in congressional communication strategies on China and trade related issues. We find that, even though Chinese import competition impacted both Republican- and Democrat-held districts, Republican politicians engage in more protectionist and anti-China rhetoric and policy proposals. Using press release data from members of Congress, we show that, among districts more exposed to Chinese imports, Republicans are more likely to blame China as the problem. But there is no difference between Republican and Democratic messaging on trade issues in general. We attribute this partisan shift in political communication strategy to the fact that Republican legislators are more constrained by their party platform from advocating for trade protectionism and social welfare relative to Democrats. Blaming the negative externalities of import competition on China rather than on trade policy has allowed Republican incumbents to continue to support their party’s free trade platform without alienating their constituents. This explains why candidate Trump’s protectionist message linking China and trade resonated with the Republican base much more so than proposals that were better grounded in economic realities.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131115081","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In recent decades, dictatorships based on mass repression have largely given way to a new model based on the manipulation of information. Instead of terrorizing citizens into submission, “informational autocrats” artificially boost their popularity by convincing the public they are competent. To do so, they use propaganda and silence informed members of the elite by co-optation or censorship. Using several sources, including a newly created dataset on authoritarian control techniques, we document a range of trends in recent autocracies consistent with this new model: a decline in violence, efforts to conceal state repression, rejection of official ideologies, imitation of democracy, a perceptions gap between the masses and the elite, and the adoption by leaders of a rhetoric of performance rather than one aimed at inspiring fear.
{"title":"Informational Autocrats","authors":"S. Guriev, D. Treisman","doi":"10.2139/ssrn.3208523","DOIUrl":"https://doi.org/10.2139/ssrn.3208523","url":null,"abstract":"In recent decades, dictatorships based on mass repression have largely given way to a new model based on the manipulation of information. Instead of terrorizing citizens into submission, “informational autocrats” artificially boost their popularity by convincing the public they are competent. To do so, they use propaganda and silence informed members of the elite by co-optation or censorship. Using several sources, including a newly created dataset on authoritarian control techniques, we document a range of trends in recent autocracies consistent with this new model: a decline in violence, efforts to conceal state repression, rejection of official ideologies, imitation of democracy, a perceptions gap between the masses and the elite, and the adoption by leaders of a rhetoric of performance rather than one aimed at inspiring fear.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116965422","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Despite its salience in modern politics, political scandal has yet to be treated as a subject of inquiry in political economy. This paper offers a rational choice theory of scandal as the result of the strategic production and use of scarce knowledge regarding politicians, parties, and organizations. It argues that given voters' limited memories and politicians' desire to maximize votes, scandalous information will be an object of speculative investment, produced and stored in order to maximize its return via optimally timed release to the public. The incentives of parties and campaigns in both primaries and general elections are considered, and an empirical test is conducted on the coincidence of scandal and election seasons.
{"title":"Scandal","authors":"Slade Mendenhall","doi":"10.2139/ssrn.3189788","DOIUrl":"https://doi.org/10.2139/ssrn.3189788","url":null,"abstract":"Despite its salience in modern politics, political scandal has yet to be treated as a subject of inquiry in political economy. This paper offers a rational choice theory of scandal as the result of the strategic production and use of scarce knowledge regarding politicians, parties, and organizations. It argues that given voters' limited memories and politicians' desire to maximize votes, scandalous information will be an object of speculative investment, produced and stored in order to maximize its return via optimally timed release to the public. The incentives of parties and campaigns in both primaries and general elections are considered, and an empirical test is conducted on the coincidence of scandal and election seasons.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"138 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122758678","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The goal of the current paper is to verify how an entrepreneur’s structural, relational and cognitive social capital levels are perceived by young people in Poland. The research involved a group of 374 undergraduate business students from a Polish university as participants. Participants completed a survey on entrepreneurial cognitions. It was found that participants assess the level of an entrepreneur’s social capital as relatively low. Due to the fact that social capital, and its different dimensions, serve different purposes in the process of venture creation, the result obtained can be considered alarming. Its practical implications are related to the necessity to review and design activities facilitating the development of an entrepreneurial culture in Poland. The value and the originality of the paper lie in the approach that allowed us to investigate which dimensions of an entrepreneur’s social capital are seen as particularly weak by people for whom launching a new business is a viable option in the near future.
{"title":"The Perception of an Entrepreneur's Structural, Relational and Cognitive Social Capital Among Young People in Poland - An Exploratory Study","authors":"Paweł P. Ziemiański","doi":"10.7341/20181416","DOIUrl":"https://doi.org/10.7341/20181416","url":null,"abstract":"The goal of the current paper is to verify how an entrepreneur’s structural, relational and cognitive social capital levels are perceived by young people in Poland. The research involved a group of 374 undergraduate business students from a Polish university as participants. Participants completed a survey on entrepreneurial cognitions. It was found that participants assess the level of an entrepreneur’s social capital as relatively low. Due to the fact that social capital, and its different dimensions, serve different purposes in the process of venture creation, the result obtained can be considered alarming. Its practical implications are related to the necessity to review and design activities facilitating the development of an entrepreneurial culture in Poland. The value and the originality of the paper lie in the approach that allowed us to investigate which dimensions of an entrepreneur’s social capital are seen as particularly weak by people for whom launching a new business is a viable option in the near future.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125409112","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Behavioral economics, the analysis of economic decisions, has made enormous progress over the last decades and become accepted as a major field in economics. How is behavioral economics to be compared to the neoclassical model? As a revision of the neoclassical model enhancing the set of variables for motivation such as fairness in the utility function which is then to be maximized? Or is behavioral economics a revolution, a departure from the neoclassical axioms, a new model? This paper argues that many of the findings in behavioral economics are incompatible with the neoclassical model and have paved the way for a revolution in economics.
{"title":"Revision or Revolution? A Note on Behavioral vs. Neoclassical Economics","authors":"R. Schettkat","doi":"10.2139/ssrn.3204441","DOIUrl":"https://doi.org/10.2139/ssrn.3204441","url":null,"abstract":"Behavioral economics, the analysis of economic decisions, has made enormous progress over the last decades and become accepted as a major field in economics. How is behavioral economics to be compared to the neoclassical model? As a revision of the neoclassical model enhancing the set of variables for motivation such as fairness in the utility function which is then to be maximized? Or is behavioral economics a revolution, a departure from the neoclassical axioms, a new model? This paper argues that many of the findings in behavioral economics are incompatible with the neoclassical model and have paved the way for a revolution in economics.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124075700","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A core question in the study of democratic politics is what factors influence the decision to run for office. A full accounting of the process of candidate emergence requires understanding the individual-level factors that influence potential candidates. Yet, existing studies typically focus on a single factor in isolation or study aggregate outcomes, rather than individual-level decisions. To overcome these limitations, we embed a conjoint experiment into a survey of local officials — a population from which candidates for from which candidates for higher office often emerge. We vary election scenarios and measure interest in running for the given office. Politicians are more sensitive to variation in the fundraising burden than any other factor considered — including legislative salary. Politicians are also deterred by the presence of an incumbent and by negative advertising. We find little evidence that they are directly responsive to their opponent’s ideology.
{"title":"Why Not Run? How The Demands of Fundraising Undermine Ambition for Higher Office","authors":"William Marble, Nathan R. Lee","doi":"10.2139/ssrn.3165193","DOIUrl":"https://doi.org/10.2139/ssrn.3165193","url":null,"abstract":"A core question in the study of democratic politics is what factors influence the decision to run for office. A full accounting of the process of candidate emergence requires understanding the individual-level factors that influence potential candidates. Yet, existing studies typically focus on a single factor in isolation or study aggregate outcomes, rather than individual-level decisions. To overcome these limitations, we embed a conjoint experiment into a survey of local officials — a population from which candidates for from which candidates for higher office often emerge. We vary election scenarios and measure interest in running for the given office. Politicians are more sensitive to variation in the fundraising burden than any other factor considered — including legislative salary. Politicians are also deterred by the presence of an incumbent and by negative advertising. We find little evidence that they are directly responsive to their opponent’s ideology.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115159865","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The last decade has seen a rapid increase in the creation and use of technology. Laws around the globe have struggled to keep up with media that has changed in response to technological convergence. The 2013 Law Commission Report—The News Media Meets 'New Media'—proposed the creation of a single regulatory body, covering all news media who voluntarily join, but its recommendations were rejected by the Government. This paper tracks the industry's self-regulation following the Law Commission report. It asks the question which has divided stakeholders and differentiates New Zealand, Australian and British drives at reform: what is successful reform of the news media? It concludes that "success" means a responsive, consistent, clear, cohesive and independent self-regulatory system. The New Zealand attempt at reform has led to some short-term benefits, but the current regulatory system's lack of sustainability represents long-term failure of reform. This failure was due to an absence of public or political motivation for reform, the Law Commission's over-emphasis on an industry-preferred scheme, and because New Zealand media has not reached the legal and ethical lows of overseas media. The extent of this failed regulation will become apparent as convergence continues, increasing functional gaps and making harms more evident. Looking forward, a bolder model, including fining and greater incentives, presents the best chance of successful reform.
{"title":"What is Successful Reform? Regulating the News Media for Sustainability","authors":"A. Leggat","doi":"10.2139/SSRN.3155000","DOIUrl":"https://doi.org/10.2139/SSRN.3155000","url":null,"abstract":"The last decade has seen a rapid increase in the creation and use of technology. Laws around the globe have struggled to keep up with media that has changed in response to technological convergence. The 2013 Law Commission Report—The News Media Meets 'New Media'—proposed the creation of a single regulatory body, covering all news media who voluntarily join, but its recommendations were rejected by the Government. This paper tracks the industry's self-regulation following the Law Commission report. It asks the question which has divided stakeholders and differentiates New Zealand, Australian and British drives at reform: what is successful reform of the news media? It concludes that \"success\" means a responsive, consistent, clear, cohesive and independent self-regulatory system. The New Zealand attempt at reform has led to some short-term benefits, but the current regulatory system's lack of sustainability represents long-term failure of reform. This failure was due to an absence of public or political motivation for reform, the Law Commission's over-emphasis on an industry-preferred scheme, and because New Zealand media has not reached the legal and ethical lows of overseas media. The extent of this failed regulation will become apparent as convergence continues, increasing functional gaps and making harms more evident. Looking forward, a bolder model, including fining and greater incentives, presents the best chance of successful reform.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"2020 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121187726","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper estimates the effect of voting eligibility on civic engagement measured along three dimensions: political motivation, political activities, and political knowledge. These outcomes originate in the AmericasBarometer 2004-2016 surveys of eligible voters. To identify the effects the paper exploits variation in field survey dates relative to election dates, given country-specific voting age laws. It is found that voter enfranchisement increases self-reported interest in politics, political socialization, and attendance of political meetings; however, consumption of political news is not statistically different between eligible and non-eligible citizens. Some evidence indicates that the political activities voters engage in translate into increased political knowledge, in contrast with the view that voters are rationally ignorant. The effects are larger in countries with enforced mandatory voting.
{"title":"Civic Engagement in the Americas","authors":"Carlos Scartascini, Razvan Vlaicu","doi":"10.18235/0001042","DOIUrl":"https://doi.org/10.18235/0001042","url":null,"abstract":"This paper estimates the effect of voting eligibility on civic engagement measured along three dimensions: political motivation, political activities, and political knowledge. These outcomes originate in the AmericasBarometer 2004-2016 surveys of eligible voters. To identify the effects the paper exploits variation in field survey dates relative to election dates, given country-specific voting age laws. It is found that voter enfranchisement increases self-reported interest in politics, political socialization, and attendance of political meetings; however, consumption of political news is not statistically different between eligible and non-eligible citizens. Some evidence indicates that the political activities voters engage in translate into increased political knowledge, in contrast with the view that voters are rationally ignorant. The effects are larger in countries with enforced mandatory voting.","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"65 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128593063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
T. Boeri, Prachi Mishra, C. Papageorgiou, A. Spilimbergo
In this imaginary dialogue, a populist and an economist discuss the role of economic shocks to explain populism. A simple correlation between economic shocks and populism is weak. However, economic shocks can explain well the phenomenon of populism in countries with low pre-existent level of trust. This is confirmed both at the macro cross-country level and also by micro evidence obtained from surveys. Finally, this finding is consistent with the "ideational approach" in political science, which emphasizes how the populist narrative opposes the "corrupt elite" to the "virtuous people."
{"title":"A Dialogue between a Populist and an Economist","authors":"T. Boeri, Prachi Mishra, C. Papageorgiou, A. Spilimbergo","doi":"10.1257/PANDP.20181121","DOIUrl":"https://doi.org/10.1257/PANDP.20181121","url":null,"abstract":"In this imaginary dialogue, a populist and an economist discuss the role of economic shocks to explain populism. A simple correlation between economic shocks and populism is weak. However, economic shocks can explain well the phenomenon of populism in countries with low pre-existent level of trust. This is confirmed both at the macro cross-country level and also by micro evidence obtained from surveys. Finally, this finding is consistent with the \"ideational approach\" in political science, which emphasizes how the populist narrative opposes the \"corrupt elite\" to the \"virtuous people.\"","PeriodicalId":223724,"journal":{"name":"Political Behavior: Cognition","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122170008","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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