Foreign Risk, Domestic Problem: Capital Allocation and Firm Performance Under Political Instability
研究发现，当企业在国外面临政治不稳定时，会错误配置资本并表现不佳。通过选举和媒体文本分析构建政治不稳定指数，发现美国企业因选举引发的政治不稳定导致投资效率下降、估值和全要素生产率降低。
We argue in this paper that firms with foreign operations misallocate capital and underperform when they face political instability abroad. We develop and test a dynamic model of firm capital allocation under foreign political instability. The model shows that as a political regime becomes less stable, independent of whether the regime becomes less business-friendly or more business-friendly, firms invest suboptimally (i.e., they either overinvest or underinvest), and their marginal q’s diverge further from an optimal level. Using elections and textual analysis of local media during national elections, we construct a novel index of political instability. We find that U.S. firms and industries with a greater exposure to election-induced political instability experience disruptions of investment efficiency that lead to lower valuations and lower total factor productivity. Therefore, international trade is a significant conduit of foreign political instability into U.S. markets. The online appendix is available at https://doi.org/10.1287/mnsc.2016.2638 . This paper was accepted by Gustavo Manso, finance.