Out of Sight, Out of Mind:The Value of Political Connections in Social Networks

This paper investigates the impact of social-network connections to politicians on firm value. We focus on the networks of university classmates and alumni among directors of U.S. public firms and congressmen. Using the Regression Discontinuity Design based on close elections from 2000 to 2008, we identify that a director’s connection to an elected congressman causes a Weighted Average Treatment Effect on Cumulative Abnormal Returns of -2.65% surrounding the election date. The effect is robust and consistent through various specifications, parametric and nonparametric, with different outcome measures and social network definitions, and across many subsamples. We find evidence to support the hypothesis that firms benefit more when connected politicians remain in state politics than when they move to federal office. Overall, our study identifies the value of political connections through social networks and uncovers its variation across different states and between state and federal political environments.Social network; political connection; close election; regression discontinuity design; firm value.

Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections

Using the regression discontinuity design of close gubernatorial elections in the U.S., we identify a significant and positive impact of the social networks of corporate directors and politicians on firm value. Firms connected to elected governors increase their value by 3.89%. Political connections are more valuable for firms connected to winning challengers, for smaller and financially dependent firms, in more corrupt states, in states of connected firms’ headquarters and operations, and in closer, smaller, and active networks. Post-election, firms connected to the winner receive significantly more state procurement contracts and invest more than do firms connected to the loser

Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections

Using the network of university classmates among corporate directors and politicians and the regression discontinuity design of close gubernatorial elections from 1999 to 2010, we identify the positive and significant impact of social-network based political connections on firm value. Firms connected to elected governors increase value by 1.36% on average surrounding the election date. Political connections are more valuable in a state with a higher level of regulation and corruption, in smaller firms, and in firms dependent on external finance. Firms connected to election winners invest more, earn better operating performance, hold more cash, and enjoy better long-term stock performance

Directors as Connectors: The Impact of the External Networks of Directors on Firms

The external networks of directors significantly impact firm value and decisions. Surrounding close gubernatorial elections, local firms with directors connected to winners increase value by 4.1% over firms connected to losers. Director network’s value increases with network strength and activities, and is not due to network homophily. Connected firms are more likely to receive state subsidies, loans, and tax credits. They obtain better access to bank loans, borrow more, pay lower interest, invest and employ more, and enjoy better long-term performance. Network benefits are concentrated on connected firms, possibly through quid pro quo deals, and unlikely spread to industry competitors

Are bond ratings informative? Evidence from regulatory regime changes

Published in Journal of Fixed Income, 2019, 29 (1), 6-13. https://doi.org/10.3905/jfi.2019.29.1.006</p

Out of Sight, Out of Mind: The Value of Political Connections in Social Networks

Using networks of university classmates among corporate directors and U.S. congressmen and the regression discontinuity design of close elections from 2000 to 2008, we identify a significant but widely varying impact of political connections on firm value. Surrounding the election day, connections to powerful senators increase firm value by 8.59%, while connections to elected congressmen decrease firm value by 2.65% on average. Political connections are especially valuable at the state level, in highly regulated and corrupted states, and in small and financially dependent firms. Following elections, firms connected to the winner decrease state activities; meanwhile, their directors tend to serve shorter tenure

Photothermal responsivity of van der Waals material-based nanomechanical resonators

Nanomechanical resonators made from van der Waals materials (vdW NMRs) provide a new tool for sensing absorbed laser power. The photothermal response of vdW NMRs, quantified from the resonant frequency shifts induced by optical absorption, is enhanced when incorporated in a Fabry-Perot (FP) interferometer. Along with the enhancement comes the dependence of the photothermal response on NMR displacement, which lacks investigation. Here, we address the knowledge gap by studying electromotively driven niobium diselenide drumheads fabricated on highly reflective substrates. We use a FP-mediated absorptive heating model to explain the measured variations of the photothermal response. The model predicts a higher magnitude and tuning range of photothermal responses on few-layer and monolayer NbSe$_{2}$ drumheads, which outperform other clamped vdW drum-type NMRs at a laser wavelength of $532\,$nm. Further analysis of the model shows that both the magnitude and tuning range of NbSe$_{2}$ drumheads scale with thickness, establishing a displacement-based framework for building bolometers using FP-mediated vdW NMRs.Comment: 7 pages, 4 figure

Optoelectrical nanomechanical resonators made from multilayered 2D materials

Studies involving nanomechanical motion have evolved from its detection and understanding of its fundamental aspects to its promising practical utility as an integral component of hybrid systems. Nanomechanical resonators' indispensable role as transducers between optical and microwave fields in hybrid systems, such as quantum communications interface, have elevated their importance in recent years. It is therefore crucial to determine which among the family of nanomechanical resonators is more suitable for this role. Most of the studies revolve around nanomechanical resonators of ultrathin structures because of their inherently large mechanical amplitude due to their very low mass. Here, we argue that the underutilized nanomechanical resonators made from multilayered two-dimensional (2D) materials are the better fit for this role because of their comparable electrostatic tunability and larger optomechanical responsivity. To show this, we first demonstrate the electrostatic tunability of mechanical modes of a multilayered nanomechanical resonator made from graphite. We also show that the optomechanical responsivity of multilayered devices will always be superior as compared to the few-layer devices. Finally, by using the multilayered model and comparing this device with the reported ones, we find that the electrostatic tunability of devices of intermediate thickness is not significantly lower than that of ultrathin ones. Together with the practicality in terms of fabrication ease and design predictability, we contend that multilayered 2D nanomechanical resonators are the optimal choice for the electromagnetic interface in integrated quantum systems