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Climate Exposure Drives Firm Political Behavior: Evidence from Earnings Calls and Lobbying Data
(with Christian Baehr and Fiona Bare). R&R, American Journal of Political Science .
[Abstract]
When do firms engage in climate politics? Expected impacts drive political activity. Specifically, we argue that regulatory concerns, business opportunities, and physical risks activate policy preferences and lobbying efforts. We measure firm-level exposure to opportunity, regulatory, and physical aspects of climate change based on discussion in quarterly earnings call transcripts for 11800+ publicly traded firms between 2001 and 2020. We estimate the effect of climate exposure on climate lobbying instances (extensive margin), expenditure (intensive margin), and targets (political entities). We find that more exposed companies, especially in terms of opportunities and regulation, are more likely to lobby. The type of climate exposure, both absolute and relative to industry peers, dictates whether firms lobby, how much they spend on lobbying, and their choice of government target. Taken together, our findings demonstrate the importance of disaggregating firm-level perceptions of climate impacts to understand patterns in political activity.
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Economic Insecurity Increases Polarization and Decreases Trust
(with Joanna Bryson).
[Abstract]
The causes of polarization and distrust are not well understood, and subject to competing hypotheses. Here we test empirically whether economic precarity is a cause. Precarity is thought to increase both political polarization and distrust due to individual risk aversion. We empirically test predictions of this hypothesis globally at both macro, country and micro, individual levels. Further, we exploit exogenous variation in European individuals' exposure to Chinese import shocks to establish a causal relation between economic insecurity and decreasing trust. We find that economic insecurity, in the form of income inequality and unemployment at the macro-level, and perceived economic insecurity at the individual level, are associated with increases of affective polarization, and of public distrust. Our work indicates the importance of social safety nets for maintaining social cohesion.
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The Green Transition and Political Polarization Along Occupational Lines
(with Hanno Hilbig and Erik Voeten).
[Abstract]
Green transition policies set long-term targets to reduce carbon emissions and other pollutants, posing a threat to workers in polluting occupations and communities reliant on these occupations. Can far right parties attract voters who anticipate losing from the green transition? We explore this in Germany, which has ambitious green policies and a large workforce in polluting occupations. The far right AfD started campaigning as the only party opposing green transition policies in 2016. Using a difference-in-differences design, we show AfD support increased in counties with more polluting jobs after this platform change. A panel survey further demonstrates that individuals in these occupations also shifted towards the AfD. Probing mechanisms, we find suggestive evidence that growing far right support is due to changing perceptions of social stigma and lower status. Our results highlight the need for a new research agenda on a backlash against the normative dimension of the green transition.
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Place-Based Policies, Local Responses, and Electoral Behavior
(with Hanno Hilbig and Andreas Wiedemann).
[Abstract]
Place-based economic policies are increasingly seen as instruments to counter political discontent in economically-depressed regions. Do regional investment subsidies affect electoral behavior? We evaluate this question in the context of Germany's largest regional investment program. Our identification strategy leverages a 2014 subsidy rate cut for manufacturing firms that - due to EU rules - was exogenous to local economic trends. The subsidy cut reduced voting for the far-right AfD and increased support for the incumbent Christian Democrats. We then demonstrate that subsidy cuts trigger two counterreactions: local firms invest more in human capital and local governments invest more in infrastructure and public goods. We argue that these dynamics signal to voters that local governments are responsive and care about their constituents, undermining populist appeals. Our findings suggest that political consequences of place-based policies - and austerity more broadly - cannot be understood without considering counteractions by local firms and governments.
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German Election Database
(with Hanno Hilbig, Florian Sichart, and Andreas Wiedemann).
[Abstract]
[Website]
[Data]
Elections are the key mechanism through which voters hold elected officials accountable. The partisan composition of local, state, and national legislatures and governments, in turn, influences key policy choices and public goods provision. Yet studying issues of representation, government responsiveness, and partisan politics across different levels of government, in particular at the local level, has been difficult. We often lack comprehensive, comparable, and harmonized election results at small-scale units such as municipalities. This paper introduces a new panel dataset of local, state, and federal election results in Germany at the municipality level with coverage for the past decades. Our data includes turnout and partisan vote shares for all major parties. We harmonize the data to address municipal boundary changes and to account for mail-in districts, providing researchers with a consistent panel of municipalities in their 2021 boundaries as well as corresponding municipal and county boundary shapefiles. Our dataset will facilitate new research on representation and responsiveness across all levels of government and how political dynamics have changed over time.
